Sales of US existing homes rose in September by the most on record, a sign cheaper borrowing costs are helping stabilise an industry that’s battling the headwinds of foreclosures and joblessness.
Purchases increased 10 per cent to a 4.53 million annual rate from 4.12 million in August, the National Association of Realtors said today in Washington. Economists forecast sales would rise to a 4.3 million pace, according to the median projection in a Bloomberg News survey. The median price fell 2.4 per cent from a year earlier.
The lowest mortgage rates on record and cheaper homes are enticing some buyers and providing a backstop for the industry that precipitated the worst recession since the 1930s. At the same time, the housing recovery will be slowed by unemployment forecast to exceed 9 per cent through 2011 and foreclosures that add to the inventory of unsold homes.
“Even with this improvement, you’re still at a remarkably depressed level,” said Tom Porcelli, senior economist at RBC Capital Markets Corp in New York. “We’re going to continue to muddle along here, given the supply- demand imbalance.”
Estimates of the 72 economists surveyed by Bloomberg ranged from 4 million to 4.8 million. In July, sales ran at a 3.84 million annual rate, the weakest in a decade’s worth of record-keeping by the Realtors group.
Stocks higher
Stocks and Treasury securities maintained gains after the report. The Standard & Poor’s 500 Index increased 1 per cent to 1,194.61 at 10.06 am in New York. The yield on the 10-year Treasury note, which moves inversely to price, fell to 2.5 per cent from 2.55 per cent late on October 22.
Compared with a year earlier, existing home sales were down 19 per cent before adjusting for seasonal patterns.
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Sales last month rose in all four regions, today’s report showed, led by a 14.5 per cent jump in the Midwest.
The median price decreased 2.4 per cent to $171,700 last month from September 2009.
Purchases of single-family homes rose 10 per cent to a 3.97 million annual rate in September from a month earlier, the group said.