US home sales rise 1.4 percent, snap a 6-month losing streak
But sales are still down from a year ago, hurt by rising interest rates. Get the latest market news at realestate.boston.com.
WASHINGTON — US home sales rose in October, breaking a six-month losing streak, but sales are still down from a year ago, hurt by rising interest rates.
The National Association of Realtors said Wednesday that sales of existing homes climbed 1.4 percent to a seasonally adjusted annual rate of 5.22 million last month from 5.15 million in September. But the October sales were still down 5.1 percent from a year earlier, the largest annual drop since July 2014.
‘‘No way is the housing market on solid ground at the moment,’’ said Lawrence Yun, the association’s chief economist.
He blamed a sharp increase in mortgage rates over the past year. Mortgage giant Freddie Mac reported Wednesday that the rate on 30-year fixed-rate mortgages was 4.81 percent, up from 3.92 percent a year ago.
“Given the rapid increase in home prices over the past few years, and the recent pick-up in mortgage rates, the housing market continues to struggle with diminished affordability,” said Mike Fratantoni, chief economist of the Mortgage Bankers Association. “The notable deceleration in median home price growth, 3.8 percent in October compared to roughly 6 percent in 2017, is a positive sign, as it indicates that home prices are rising at a more sustainable pace.”
The Federal Reserve has raised short-term rates three times this year and is expected to raise them again in December and three times next year. Given the sluggishness in the US housing market, Yun suggested, ‘‘maybe the Federal Reserve can take a little pause in their interest rate hikes.’’
The median US house price rose 3.8 percent from a year ago to $255,400. The inventory of homes for sale was 1.85 million, down from September but up 2.8 percent from a year ago. Low inventories have pushed prices higher and kept some buyers out of the market. Rising inventories will likely curb price increases and allow ‘‘for much more manageable, less frenzied buying conditions,’’ Yun said.
October sales were up in three of four US regions: They rose 1.5 percent in the Northeast, 1.9 percent in the South, and 2.8 percent in the West. They fell 0.8 percent in the Midwest.
Subscribe to the Globe’s free real estate newsletter — our weekly digest on buying, selling, and design —at pages.email.bostonglobe.com/AddressSignUp. Follow us on Facebook and Twitter @globehomes.
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com