What’s going on?

US existing home sales hit a 14-year high in October.

What does this mean?

• Demand Quantity: Sales of previously-owned US homes climbed by 4.3% YoY, bringing the annualized number of home sales to almost 7 million, which might have been even higher if the home supply weren’t at record lows
• Prices: are therefore on the rise, with the median home selling price jumping 15.5% YoY.
• US mortgage rates: are now at their lowest, which is arguably driving this house-buying fortune.

Why should I care?

For markets: Boosting the homebuilding industry.

• With the shortage of existing homes boosting demand for new ones, the S&P Homebuilders index has outperformed the overall US stock market by 14% this year.
• The construction of one-family homes – the biggest portion of the housing market – just hit its fastest pace since 2007.

The bigger picture: What’s next?

The National Association of Realtors reckons the housing market will keep growing into 2021; existing home sales will be 10% higher next year thanks to:

• still-low mortgage rates
• the coming coronavirus vaccine. 

Content source: Finimize. (2020) Make America Greet Again. Available at: https://www.finimize.com/wp/news/make-america-greet/ [Accessed on November 23, 2020]