Amid conflicting narratives on whether a US economic recovery has been losing momentum over the recent months, US home sale mushroomed at its fastest pace in 13 years last month and had clocked a gain for a second straight month, negating the dour projections US Fed had projected on Wednesday’s FOMC minutes readouts.
Aside from that, other economic data released on Friday had also suggested a sharp turnaround of a recessed US economy as both manufacturing and service sectors’ Purchasing Managers’ Index [PMI] had registered a surprise rise last month.
US home sales mushroom with mortgage rate holding near record lows
In point of fact, according to the data released by the National Association of Realtors on Friday, US existing home sales took a torrential upswing to report a gain of 24.7 per cent last month compared to the same time a year earlier, while Americans had purchased 5.86 million existing homes last months compared to a figure of 4.7 million in June.
Notably, over the narratives of a rising demand alongside a shrinkage in inventories, US home prices shot up to a record $304,100 per unit on an average last month, while taking account of June’s gain, US home sales had surged by roughly 50 per cent over the past two months as more city dwellers had spread across the country amid a brisker rise in work-from-home employees.
July’s home sale rate in tandem had marked up its steepest since the December of 2006. Meanwhile, citing an out and out optimism over the record gains in US housing market which in effect could lead to a rise in US household spending as well, a chief economist of National Association of Realtors, Lawrence Yun said following the release of July home sales data, “The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days.
With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021”.