BE2C2 Report — U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, signaling rising confidence in the economy and bolstering expectations of a pickup in growth in the first quarter.
The National Association of Realtors’ report on Wednesday came as the labor market nears full employment and investors wait for the Trump administration to act on its promises to cut taxes, increase infrastructure spending and reduce regulations.
“Existing home sales continue to shine and this bodes well for consumer spending which helps the economy go. Team Trump is trying to boost economic growth and today’s existing home sales will make the job a little easier,” said Chris Rupkey, chief economist at MUFG Union Bank in New York.
Existing home sales jumped 3.3 percent to a seasonally adjusted annual rate of 5.69 million units last month, the highest level since February 2007, the NAR said.
Economists had forecast sales rising only 1.1 percent to a pace of 5.54 million units in January. Home resales were up 3.8 percent from January 2016.
Reuters reported that demand for housing is being underpinned by a strengthening labor market, which is improving employment opportunities for young adults and, in turn, boosting household formation.
While the 30-year fixed mortgage rate appears to be stabilizing after rising rapidly in recent months, it still remains above 4 percent.
A separate report from the Mortgage Bankers Association on Wednesday showed a 2.8 percent drop in applications for loans to purchase homes last week.