Nov 22, (V7N) - In a sign of a potential rebound, sales of previously owned homes in the United States increased by 3.4 percent in October, reaching a seasonally adjusted annual rate of 3.96 million units. This marks the first year-on-year rise in home sales since July 2021, signaling that the prolonged downturn in the housing market might be coming to an end.

The uptick in sales, reported by the National Association of Realtors (NAR), comes as inventory levels rise and more homes become available, sparking increased transaction activity. Lawrence Yun, NAR’s chief economist, noted that Americans may be adapting to what is being called the "new normal" of higher mortgage rates, which are significantly above the levels seen in 2021. Despite mortgage rates hovering around 6.5 percent for a 30-year fixed-rate loan, Yun expressed optimism that the housing market will continue to recover, driven by job gains and steady economic growth.

However, challenges remain. The surge in mortgage rates, a response to the Federal Reserve’s aggressive interest rate hikes in the past two years aimed at curbing inflation, has made homeownership more expensive. Many homeowners, having locked in lower rates previously, have been reluctant to sell, contributing to a supply shortage. The NAR projects that further increases in homebuilding and more inventory will help stabilize home prices, which have risen by 4 percent year-on-year, with the median price of an existing home hitting $407,200 in October.

In global news, China has unveiled a package of measures to boost foreign trade, aiming to stimulate its slowing economy. As China battles persistent challenges, including a housing crisis, low consumption, and high youth unemployment, these new policies are designed to support exports, enhance cross-border e-commerce, and encourage foreign investment. The government’s action comes amid fears that the incoming US administration, under President-elect Donald Trump, may intensify the trade war with China, further straining the global economic outlook.

Speaking of Trump, market reactions have been mixed. While rising geopolitical tensions and concerns over oil prices have added volatility, Asian markets saw gains following Wall Street’s rebound. Investors are optimistic about Trump’s stance on cryptocurrency, with Bitcoin soaring towards the $100,000 mark, fueled by expectations of less regulatory scrutiny in a Trump White House. Meanwhile, the ongoing conflict between Russia and Ukraine has sent oil prices higher, as fears of further escalation have raised concerns over energy security.

Back on Wall Street, positive earnings reports and comments from Federal Reserve officials about future interest rate cuts have added some stability to markets, despite recent concerns about tech stock valuations. The Dow Jones closed up 1.1 percent, providing some relief for global investors.

Looking ahead, economists like Nancy Vanden Houten at Oxford Economics warn that the October home sales surge may not be sustainable. With the potential impact of hurricanes and slower Fed rate cuts, home sales could face headwinds in the coming months, further complicating the economic landscape.

END/BUS/RH