With negative news dominating the horrific cycles daily, there is at least one good report for the nation’s economy.
The Wall Street Journal, on Friday, ran a surprising front page story, providing the factual statistics that America’s home sales have skyrocketed to set a 14-year high.
The story, written by Nicole Friedman, said that October’s gains marked the fifth consecutive monthly increase and one of the best stretches for the housing market in several years.
The bright spot news is partially explained by recent ultra-low borrowing costs and the sudden shift in living preferences during the highly active pandemic.
“Some families are leaving large cities or other crowded living circumstances in response to Covid-19. They have been willing to splurge on single-family homes despite a troubled job market and soaring home prices,” she wrote.
Mortgage rates are now at their lowest level since Freddie Mac began tracking them in 1971. The reporter wrote that the trend may well drive sales momentum into 2021.
“In the pandemic, nothing has been more surprising — positively surprising — than single-family housing,” Mark Zandi, chief economist at Moody’s Analytics said. As more people are working remotely, “this is a fundamental shift in underlying housing preferences.”
A severe shortage of homes for sale is boosting demand for newly-built housing, which could spur more hiring and spending by home builders. Increase home sales can also lead to consumer spending on appliances, furniture and other home goods.
The increase in home sales in October was 26.6% higher than was posted in the previous year.
Demand for single-family homes has also extended to the rental market, where rents on single-family homes are rising at the fastest rate since last decade’s foreclosure crisis.
Existing home sales rose 4.3% in October from September to a seasonally adjusted annual rate of 6.85 million, the highest level since February 2006, the National Association of Realtors said Thursday.
Real estate agents reported that demand remains high from shoppers looking for more space to accommodate working from home. There were 1.42 million homes for sale at the end of October, down 2.7% from September and down 19.8% from October 2019, according to the NAR. The median homes in each of the 181 metro areas tracked was higher in the third quarter from a year earlier.