The National Association of Realtors reports on January sales of existing U.S. homes Wednesday at 10 a.m. Eastern. Economists forecast sales will tick up to a seasonally adjusted 5.55 million, up from 5.49 million in December.
STURDY SALES?: Sales of existing homes slipped in December to a seasonally adjusted annual rate of 5.49 million. Yet for all of last year, sales rose 3.8 percent to 5.45 million. Those figures point to a housing market that has largely recovered from the housing bust that set off the Great Recession a decade ago. Sales slipped below 4 million a year during the downturn.
HEADWINDS: Still, the recovery has left the housing market facing new challenges. While more Americans are interested in buying a home, many owners are reluctant to sell. That’s left the supply of available homes nationwide at nearly a two-decade low.
With fewer homes for sale, buyers have bid up prices to ever-higher levels. By some measures, home prices nationwide finally returned to their pre-recession levels this fall. In sought-after cities such as San Francisco and Seattle, prices are at record highs.
Very low mortgage rates last year helped homebuyers afford the higher prices, but that has reversed so far in 2017. Since the election of Donald Trump, investors are anticipating that Trump’s proposed tax cuts and deregulation will result in faster growth and rising inflation. That has pushed up Treasury yields and mortgage rates.
The average 30-year fixed rate ticked down to 4.15 percent last week, according to mortgage buyer Freddie Mac, from 4.17 percent the previous week. While that is historically low, it is far above last year’s average of 3.65 percent.
The increase in mortgage rates may have also impacted other parts of the housing market. The number of new homes and apartments started by developers fell 2.6 percent in January, the Commerce Department said last week. That drop came after a strong increase in 2016.
And sales of new homes plunged 10.4 percent in December, the government said last month.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- Main Street Minute: Glendale health care campus giving out eclipse glasses
- Trump ends business councils after slew of CEOs drop out
- Pressured by government, Uber agrees to protect rider data
- Main Street Minute: Arizona Make-A-Wish receives generous donation
- Main Street Minute: Scottsdale-based P.F. Chang’s opens in London