To everyone’s surprise, U.S. home resales unexpectedly rose in October. On Monday the National Association of Realtors announced that existing home sales climbed 2.1 percent last month to a seasonally adjusted annual rate of 4.79 million units.
Some speculate that super-storm Sandy, which slammed the U.S. East Coast on Oct. 29th had only a minuscule impact on home resales. The only region where the pace of sales slipped was the Northeast. Throughout the nation, the number of existing homes for sale have fell 1.4 percent. Currently about 2.4 million homes are for sale, which is the lowest amount ever since December 2002. At the rate sales are going, inventories would be exhausted in about 6 months.
With the gauge remaining below 50, the housing market is still in slow recovery. This means builders are viewing marketing conditions as poor rather than favorable. Since April 2006, the index has not been about 50. Still, the measure has made strong progress over the last year, helping to cement optimism in the sector. Still one of the biggest overhangs in the economic recovery is housing that led the financial crisis of 2008-09.
As inventories of foreclosed and distressed homes begin to shrink, builders are reporting increasing demand for new homes.