Home sales rise 1.4 percent, snap 6-month losing streak

(Southside Daily file photo/Courtesy of Pixabay)
(Southside Daily file photo/Courtesy of Pixabay)

U.S. home sales rose in October, breaking a six-month losing streak. But sales are still down from a year ago, hurt by rising interest rates.

The National Association of Realtors said Wednesday that sales of existing homes climbed 1.4 percent to a seasonally adjusted annual rate of 5.22 million last month from 5.15 million in September. But the October sales were still down 5.1 percent from a year earlier, the largest annual drop since July 2014.

“No way is the housing market on solid ground at the moment,” says Lawrence Yun, the association’s chief economist.

He blamed a sharp increase in mortgage rates over the past year. Mortgage giant Freddie Mac reported Wednesday that the rate on 30-year, fixed-rate mortgages was 4.81 percent, up from 3.92 percent a year ago.

The Federal Reserve has raised short-term rates three times this year and is expected to raise them again in December and three times next year. Given sluggishness in the U.S. housing market, Yun suggested that “maybe the federal reserve can take a little pause in their interest rate hikes.”

The median U.S. house price rose 3.8 percent from a year ago to $255,400. The inventory of homes for sale was 1.85 million, down from September but up 2.8 percent from a year ago. Low inventories have pushed prices higher and kept some buyers out of the market. Rising inventories will likely curb price increases and allow “for much more manageable, less frenzied buying conditions,” Yun said.

October sales were up in three of four U.S. regions: They rose 1.5 percent in the Northeast, 1.9 percent in the South and 2.8 percent in the West. They fell 0.8 percent in the Midwest.

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John Mangalonzo (john@localvoicemedia.com) is the managing editor of Local Voice Media’s Virginia papers – WYDaily (Williamsburg), Southside Daily (Virginia Beach) and HNNDaily (Hampton-Newport News). Before coming to Local Voice, John was the senior content editor of The Bellingham Herald, a McClatchy newspaper in Washington state. Previously, he served as city editor/content strategist for USA Today Network newsrooms in St. George and Cedar City, Utah. John started his professional journalism career shortly after graduating from Lyceum of The Philippines University in 1990. As a rookie reporter for a national newspaper in Manila that year, John was assigned to cover four of the most dangerous cities in Metro Manila. Later that year, John was transferred to cover the Philippine National Police and Armed Forces of the Philippines. He spent the latter part of 1990 to early 1992 embedded with troopers in the southern Philippines as they fought with communist rebels and Muslim extremists. His U.S. journalism career includes reporting and editing stints for newspapers and other media outlets in New York City, California, Texas, Iowa, Utah, Colorado and Washington state.