Existing-home sales increased in October to their strongest pace since earlier this summer, according to a new report, while a separate one showed the overall U.S. economy continued growing at a strong pace last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums, and co-ops, increased 2% to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September, said the National Association of Realtors on Tuesday.
After last month's increase, sales are at their strongest pace since June, but they still remain 0.9% below a year ago.
Lawrence Yun, NAR chief economist, said sales activity in October picked up for the second straight month, with increases in all four major regions.
"Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home," he said. "While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated."
According to Yun, the residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms.
The median existing-home price for all housing types in October was $247,000, up 5.5% from October 2016. October's price increase marks the 68th straight month of year-over-year gains.
Single-family home sales, the largest share of the new home market, climbed 2.1% to a seasonally adjusted annual rate of 4.87 million in October from 4.77 million in September, but are still 1% below the 4.92 million pace a year ago.
Existing condominium and co-op sales increased 1.7% to a seasonally adjusted annual rate of 610,000 units in October, unchanged from October 2016.
This followed a report from earlier in the week that showed economic conditions in the near-term are expected to continue with recent improvements.
The Conference Board’s Leading Economic Index (LEI) for the U.S. jumped 1.2% in October to 130.4, following a 0.1% gain in September and a 0.4% increase in August.
“The US LEI increased sharply in October, as the impact of the hurricanes dissipated,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “The growth of the LEI, coupled with widespread strengths among its components, suggests that solid growth in the US economy will continue through the holiday season and into the new year.”
Overall, nine out of the 10 component of the LEI were positive in October reflecting broad-based contribution to the index, according to Wells Fargo Securities.
The Conference Board's Coincident Economic Index for the U.S., which measures current economic conditions increased 0.3% in October ,following improvements of 0.1% in September and no change in August.
The group's Lagging Economic Index for the U.S., which measures past conditions, moved 0.2% higher in October, following no change in September, and a 0.2% increase in August.