US Housing Market Has Unexpected Turnaround
Home sales in the United States climbed in the first half of this year, an unexpected, yet positive sign for economists. The number of previously owned homes being sold also increased to a 5.15 million units annualized pace in July. Economists have pointed to employment growth, low mortgage rates and more properties to choose from, for giving more Americans the confidence to buy a home in today’s market. According to the National Association of Realtors, the number of previously owned homes sold in July was the highest number reached in 10 months.
The Federal Reserve may even consider increasing the target interest rate sooner than anticipated in light of the recent market strength. Weak wage growth and low inflation have given the Fed room to hold their target rate near zero, helping keep mortgage rates low.
The recent growth in the US economy has been led by declining numbers in jobless claims, coupled with increasing building permits being written. Builders are now showing signs of life after a hard first half-year in the construction sector (nationally anways. Our local Bozeman summer probably reached a full sprint!). The total number of properties for sale climbed to 2.37 million, the most since August 2012. Recovering prices have given sellers the confidence to build, knowing they will be able to find a buyer.
Finally, the median price for existing homes also increased, rising 4.9%, from $212,400 per home to $229,000 per home. Signs are looking positive for the second half of the year. Home sales, purchases and prices are all increasing and economists have suggested the trend will continue for the rest of the year.