Positive Indicators from the Housing Market

Wall Street Journal writer Laura Kusisto reported last week that, “Three indicators released on [Oct. 29th] show the housing market is gaining modest strength in the latter half of the year thanks to lower mortgage rates.

“Average national home prices grew 3.2% in the year ending in August, according to data released Tuesday by the S&P CoreLogic Case-Shiller National Home Price Index, up slightly from 3.1% the prior month.

The number of Americans who own a home also grew through the summer months. The homeownership rate ticked up to 64.8% in the third quarter, from 64.4% a year earlier, the Commerce Department reported. That matches the highest levels in five years and is within striking distance of its long-run average of 65.2%.”

The Journal article noted that, “Pending home sales, a forward-looking indicator based on purchase contracts signed, indicated that home sales could tick up in the coming months. Pending sales rose 1.5% in September, the second consecutive positive month, the National Association of Realtors said [on Oct. 29th].

“Lawrence Yun, the trade group’s chief economist, said he is still concerned that prices are rising too fast because of a shortage of homes for sale.

“‘Going forward, interest rates will surely not decline in a sizable way, so the changes in the median price will be the key to housing affordability,’ he said.”

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