Sales of previously owned US homes rose in October for the first time in seven months, suggesting demand is stabilising at a lower level as available properties become less scarce.
Contract closings increased from the prior month to an annual rate of 5.22 million, the National Association of Realtors said. That compared with economists’ projections for sales of 5.2 million. The median sales price rose 3.8 percent from a year earlier, while the inventory of available homes expanded 2.8 percent, the third straight increase.
Even with the monthly increase, the market remains relatively soft, as sales were down 5.1 percent from a year earlier, the biggest drop since 2014. Housing is being buffeted by the highest mortgage rates in eight years and rising property prices that continue to outpace wages. Residential investment accounts for about 3.9 percent of the economy.
Two other housing reports this week gave a mixed picture of the sector: sentiment among homebuilders dropped the most since 2014 in November amid pessimism over both current and future demand, while the government data show-
ed housing starts rebounding slightly in October.
Even with the slowdown in the housing market, Federal Reserve officials are still projected to raise interest rates in December for the fourth time this year and continue tightening in 2019, as consumer spending is seen remaining solid.