The national housing market is a bit better lately, but it’s still underwhelming considering the overall economic environment.
On Thursday, the National Association of Realtors reported that its index of pending home sales—sales of previously owned homes that are under contract but haven’t been finalized—bounced back in August, putting it 2.5% above its year-earlier level, The Wall Street Journal reports. That follows Wednesday’s Commerce Department report showing that new-home sales jumped last month and last week’s report that existing-home sales firmed in August.
The biggest factor behind the pickup in housing has probably been the decline in interest rates. Earlier this month, the average rate on a 30-year fixed mortgage slipped to 3.49%, according to Freddie Mac. That compared with 4.54% a year earlier. It was the lowest rate since 2016, and one of the lowest in history.
Meanwhile, the job market continues to do well, with the unemployment rate near a 50-year low and wages picking up. Home-price gains have moderated over the past year and are now rising more slowly than per capita after-tax income, helping affordability.
But welcome as the pickup has been, it must be kept in perspective. Combined new- and existing-home sales have gotten back only to where they were in the beginning of last year. And they are about level with where they were in 2000 when the U.S. population was significantly lower than it is now. Read the full story.
