Market Recap: Existing Home Sales Surge, FOMC Minutes, and Rising Rates
Mortgage rates are still rising but not as drastically. This week brought mixed housing market news and the release of the FOMC minutes. While existing home sales are up, new home sales are down.
Existing home sales are up to their highest level in 10 years. The National Association of Realtors reported that October’s existing home sales are 2% higher than in September and 5.9% higher in a year-over-year basis. These numbers suggest a strengthened housing market as demand increases.
New home sales dropped in October to a seasonally adjusted annual rate of 563,000. Analysts believe that the drop in sales could be linked to a lack of inventory since construction of new homes has not kept up with demand since the recession.
The FOMC meeting minutes for the November 2nd meeting were released Wednesday. Senior Federal Reserve officials foreshadowed an interest rate hike “relatively soon” and asserted that the increase in jobs is driving “wage inflation.” Even with the recent change of command in Washington, the economy is on track for a December Rate Hike.
Even with low construction numbers, the record existing home sales bode well for the housing market. Mortgage rates are starting to level out after their initial post-election climb and all signs point to a rate hike next month.
Sources: CNBC, Mortgage Daily News, MarketWatch, MarketWatch