US home sales have risen in the past 12 months, according to new figures, the first annual leap since October 2013.
Data from the National Association of Realtors shows that existing-home sales rose in October 2014 for the second straight month in a row,
Existing-home sales, which consist of completed transactions for single-family homes, townhomes, condominiums and co-ops, jumped 1.5 per cent to a seasonally adjusted annual rate of 5.26 million in October from an upwardly-revised 5.18 million in September.
Indeed, sales are now at their highest annual pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5 per cent from last October) for the first time since last October.
The improvements follow a period of cooling, both in terms of pricing and demand, as the has stabilised across 2014.
Lawrence Yun, NAR chief economist, says it has been a year of two halves: "Sales activity in October reached its highest annual pace of the year, as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth.
"Furthermore, the job market has shown continued strength in the past six months. This bodes well for solid demand to close out the year and the likelihood of additional months of year-over-year sales increases."
The median existing-home price also climbed year-on-year by 5.5 per cent, the 32nd month of annual price growth in a row.
All-cash sales were 27 per cent of transactions in October, up from 24 per cent in September but down from 31 per cent in October of last year. Individual investors, who account for many cash sales, purchased 15 per cent of homes in October, up from 14 percent last month but below October 2013 (19 percent).
With demand climbing from domestic buyers able to return to the housing ladder, thanks to improving economic conditions, inventory also declined 2.6 per cent in October. While the current 2.2 million existing homes on the market is the lowest since March 2014, though, Yun says that a repeat of last year's supply shortage and resulting price spike is unlikely.
Indeed, stock levels are up 5.2 per cent compared to this time last year, as sellers also become more confident.
"The growth in housing supply this year will likely prevent the drastic sales slowdown and coinciding spike in home prices we saw last winter due to low inventory," he explains. "However, more housing starts are needed to increase supply, meet current demand and keep price growth in check."
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