WASHINGTON (Feb 22): U.S. home resales surged to a 10-year high in January, as buyers shrugged of higher prices and mortgage rates, a sign of growing confidence in the economy.
The National Association of Realtors said on Wednesday existing home sales jumped 3.3% to a seasonally adjusted annual rate of 5.69 million units last month. That was the highest level since February 2007.
December's sales pace was revised up to 5.51 million units from the previously reported 5.49 million units. Economists had forecast sales rising 1.1% to a 5.54 million-unit pace in January. The NAR also revised sales data going back to 2014. The revisions were minor and had no impact on the characterization of the housing market.
Sales were up 3.8% from January 2016. Demand for housing is being underpinned by a strengthening labor market, which is improving employment opportunities for young adults and, in turn, boosting household formation.
A persistent shortage of properties available for sale, which is lifting house prices, remains an obstacle to a robust housing market. While the 30-year fixed mortgage rate appears to be stabilisingm after rising rapidly in recent months, it still remains above 4%. In contrast, annual wage growth is running below 3%.