US home sales shoot up to 10-year high
Rising demand for housing comes amid fewer properties listed for sale, leading to situation that rewards would be buyers who act quickly
Americans purchased homes in March at the fastest pace in over a decade, a strong start to the traditional spring buying season.
Sales of existing homes climbed 4.4 per cent last month to a seasonally adjusted annual rate of 5.71 million, the National Association of Realtors said Friday. This was the fastest sales rate since February 2007.
The US housing market faces something of a split personality: A stable economy has intensified demand from would-be buyers, but the number of properties listed for sale has been steadily fading. The result of this trend is prices rising faster than incomes, homes staying on the market for fewer days and a limit on just how much home sales can grow. It’s a situation that rewards would-be buyers who can act quickly and decisively.
“The pace of sales we saw in March is unsustainable,” said Nela Richardson, chief economist at the brokerage Redfin. “Sales may be soaring, but inventory isn’t.”
The inventory shortage largely reflects the legacy of a housing bubble that began to burst a decade ago.
Foreclosed properties were snapped up by investors who turned the homes into income generating rentals, depriving the market of supply. And many owners who escaped the downturn unharmed chose to refinance their mortgages at extremely low rates, possibly making them hesitant to move to a new house that could increase their monthly costs.
