Resale home activity rising along with builder confidenceNovember 19, 2012 @ 7:46 am (Updated: 1:13 pm - 11/20/12 )
Sales of previously occupied homes rose solidly in October, helped by improvement in the job market and record-low mortgage rates, the Associated Press reported.
The increase along with a jump in homebuilder confidence this month suggests the housing market continues to recover.
The National Association of Realtors reported that sales rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million. That's up from 4.69 million in September, which was revised lower.
The sales pace is roughly 11 percent higher than a year ago. However, it remains below the more than 5.5 million that economists consider consistent with a healthy market, AP reported.
Meanwhile, confidence among U.S. homebuilders rose this month to its highest level in six and a half years, driven by strong demand for newly built homes and growing optimism about conditions next year.
The National Association of Home Builders/Wells Fargo builder sentiment index increased to 46, up from 41 in October. Readings below 50 suggest negative sentiment about the housing market. The index last reached that level in April 2006. Still the index has been trending higher since October 2011, when it stood at 17.
There have been other positive signals from the housing market. Applications for mortgage loans to buy homes jumped 11 percent in the week ended Nov. 9, compared with a week earlier, the Mortgage Bankers' Association said last week. Purchase applications are up 22 percent in the past year.
Home prices have been rising steadily, though they remain lower than they were six years ago. And builders broke ground on new homes and apartments at the fastest pace in more than four years in September. The jump could help boost the economy and hiring.
Still, the market has a long way back to full health. Many potential home buyers cannot meet stricter lending standards or produce larger down payments required by banks.
Ben Bernanke, the Federal Reserve chairman, said that banks' overly tight lending standards may be preventing sales and holding back the U.S. economy.
Please login below with your Facebook, Twitter, Google+ or Disqus account. Existing MyNorthwest account holders will need to create a new Disqus account or use one of the social logins provided below. Thank you.