U.S. home resales rose to their highest level in over 9.5 years during October, offering more evidence of a rise in economic growth in the fourth quarter; however, a recent surge in mortgage rates could slow this housing market activity.
According to the National Association of Realtors, on Tuesday existing home sales rose 2.0 percent to an annual rate of 5.6 million units last month. This is the highest level since February 2007 when rates were at 5.49 million units. Reports came out last week that showed a surge in housing as well as strong reports on retail sales and labor markets suggesting the economy continued to gain speed quickly in the fourth quarter.
Mortgage rates have been watched carefully since the election. This showed that the fixed 30-year mortgage rate has increased about 40 basis points to an average 3.94 percent, according to data from mortgage finance firm Freddie Mac.
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This sounds like great news for our recovering economy. I think it will be interesting to see what happens when the Fed raises interest rates, as it is expected to do this December. I wonder if people have largely been trying to take advantage of the historically low rates, causing sales to rise amid speculation that the Fed will raise rates, or if the growth will continue after they are raised.
ReplyDeleteThis is great news for the United States since the housing market was hit so hard during the most recent recession. Although the Fed is suppose to raise interest rates, they are not going to raise them enough to have this much of an effect on the housing market.
ReplyDeleteIt's great and all that we are at the highest in home sales we have been since the financial crisis, but I'd be worried if the home market becomes a bubble if the home sale rate continues to rise with no end in sight.
ReplyDeleteI agree that it is great that home sales have risen to their highest level since 2007. However, I am concerned about the potential of another housing crisis just like what previously happened. The surge in mortgage rates potentially slowing down the activity in the housing market is a good sign.
ReplyDeleteI believe that the Fed will lower interest rates and I believe that the slight raise will curb home sales to help avoid another bubble.
ReplyDeleteThe housing market struggled since the 2008 recession, with increased disparities of housing rates between buyers and sellers of property. Therefore, it is a great that sales have hit their highest since 9.5 years, along with a surge in mortgage rates, which is a positive sign for the housing market.
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