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New Home Sales Reach 10 Year High
A recent report from the Commerce Department provided information that sales of new single-family homes rose in October, reaching a 10 year high, despite low inventory across the country.
The Commerce Department said new home sales increased 6.2 percent to a seasonally adjusted annual rate of 685,000 units in October, the highest level since October 2007. This comes as a shock since economists predicted new-home sales would fall 6 percent in October, and instead they surged.
“New home sales are a leading indicator and the jump in October sales are leading the economy higher as we finish out the year,” said Chris Rupkey, chief economist at MUFG in New York. “You have to be very confident to make the biggest big-ticket purchase of your life.”
New-home sales account for roughly 11 percent of overall home sales, and have increased each of the last three months.
While the tragedy surrounding Hurricanes Harvey and Irma may have accounted for a stall in sales earlier this year, the milder weather into the Fall and Winter might explain the rising sales currently.
“Sales rose sharply in the Northeast and Midwest, which are the smallest regions for new home sales and often greatly influenced by atypical swings in the weather,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, North Carolina.
It seems the housing market is back, 10 years after the detrimental crash, and is following the upward trends to flourish.