The Housing Market Just Bounced Back For The First Time In Years | Global News Avenue

Home sales rebounded in October, reaching a milestone not seen in years.

The National Association of Realtors said Thursday that existing home sales increased 3.4% in October from September. Based on the seasonally adjusted October sales pace, full-year sales will reach 3.96 million vehicles, an increase of 2.9% from October 2023. This is the first time since July 2021 that the sales pace has accelerated year-on-year.

The uptick in sales is a rare bright spot in a housing market that has been nearly paralyzed by high home prices and high mortgage rates. Unable to afford mortgage loan Causing first-time homebuyers to exit the market and slowing sales. For-sale inventory has increased in recent months as more homeowners put their homes on the market, which often means ditching a low fixed-rate mortgage and buying a new mortgage at a considerably higher rate.

“There is finally good news for the real estate market,” Lawrence Yun, the association’s chief economist, said on a conference call with reporters. “More inventory clearly helps boost home sales despite higher mortgage rates.”

There were 1.37 million homes for sale in October, a significant increase from the end of last year. However, that’s still well below typical pre-pandemic levels, and sales remain slow by historical standards.

Mortgage rates could be key

Whether the market returns further to the old normal may depend on where mortgage rates go in the coming months.

The average interest rate on a 30-year fixed-rate mortgage was 6.78% last week, up from 6.08% at the end of September, according to Freddie Mac.

Rates have risen in recent months despite the Federal Reserve lowering influential interest rates. Treasury investors have already priced in the potential impact Donald Trump’s re-election And some of the policies he proposes could stoke inflation. That, in turn, pushes up mortgage rates, which are particularly affected by the yield on the 10-year Treasury note.

Fed policymakers Interest rate cut expected As long as inflation remains on its downward trajectory, there will be more in the coming months. That could put downward pressure on mortgage rates, Yun said, but may not be enough to bring them back to pre-pandemic levels.

“Maybe mortgage rates will go back to 6%, but I think that’s it,” he said. “We’re not going back to 3%, 4%, 5% mortgage rate conditions.”