US existing home sales hit highest pace since February 2007

Sales of previously owned homes in the US hit the highest rate in 10 years, fuelled by demand in the Northeast and Midwest.

Existing home sales rose 4.4 per cent in March from the previous month to an annualised pace of 5.71m units, the National Association of Realtors said. That topped economists’ estimates of a 2.2 per cent gain to 5.6m and followed a 3.9 per cent drop in February.

The report showed that home sales jumped 10.1 per cent in the Northeast and 9.2 per cent in the Midwest.

Home sales picked up even as prices continue to rise. The median existing-home price for all housing types was $236,400, up 6.8 percent from a year ago.

Lawrence Yun, economist at NAR, said that a rising number of households entered the market and were successfully able to close on home purchases. “Although finding available properties to buy continues to be a strenuous task for many buyers, there was enough of a monthly increase in listings in March for sales to muster a strong gain. Sales will go up as long as inventory does.”

Strong job gains, improving wages and consumer confidence have helped support the housing market even as supply of homes remains tight and investors keep an eye on mortgage rates. According to Freddie Mac, the average commitment rate for a 30-year, fixed-rate mortgage rose for the fifth straight month in March to 4.20 percent from 4.17 percent in February.

But Friday’s data showed that the key spring selling season for the US got off on solid footing as sales previously owned homes, which account for a larger portion of the market, followed disappointing data on housing starts data earlier in the week.

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