Home sales surge thanks to low rates and high de­mand

Chicago Sun-Times - - BUSINESS -

SIL­VER SPRING, Md. — Spurred by ul­tra-low mort­gage rates, home buy­ers rushed last month to snap up a lim­ited sup­ply of ex­ist­ing houses, caus­ing the pace of pur­chases to jump by a record­high 24.7%.

The July surge in sales re­ported Fri­day by the Na­tional As­so­ci­a­tion of Real­tors marked the sec­ond straight month of ac­cel­er­at­ing home pur­chases. The back-to-back in­creases have helped sta­bi­lize the home-buy­ing mar­ket, which all but froze early this spring when the vi­ral pan­demic erupted across the U.S.

With July’s in­crease, to a sea­son­ally ad­justed an­nual rate of 5.86 mil­lion, pur­chases of ex­ist­ing homes are up 8.7% from a year ago. Near record-low mort­gage rates have made homes more af­ford­able for buy­ers, and many are act­ing to cap­i­tal­ize on them. The av­er­age rate on a 30-year fixed rate mort­gage is now 2.99%, the mort­gage buyer Fred­die Mac said Thurs­day. A year ago, it was 3.55%.

The fig­ures also point to a per­sis­tently un­equal re­cov­ery: Many higher-paid whitecol­lar work­ers, who have dis­pro­por­tion­ately kept their jobs and can work re­motely, are able to buy homes, in some cases far from their em­ploy­ers’ head­quar­ters.

By con­trast, renters are more likely to work in lower-pay­ing ser­vice jobs at restau­rants, ho­tels, gyms, and hair salons, where lay­offs have been ram­pant and their abil­ity to pay rent is de­clin­ing. The ex­pi­ra­tion of a fed­eral mora­to­rium on evic­tions has also raised their risk of los­ing their home.

S&P 500 hits an­other record

The S&P 500 ticked higher to close at an­other all-time high Fri­day, powered by strength for tech­nol­ogy stocks and a cou­ple of re­ports on the U.S. econ­omy that were bet­ter than ex­pected.

The bench­mark in­dex, which sur­passed its record close set on Tues­day, rose 11.65 points to 3,397.16.

A re­port from IHS Markit on Fri­day said pre­lim­i­nary data sug­gests out­put from the U.S. pri­vate sec­tor is at an 18-month high and sales of pre­vi­ously oc­cu­pied homes were also stronger in July than econ­o­mists ex­pected.

Tech con­tin­ues to churn out big profits as work-from-home and other tech-friendly trends ac­cel­er­ate.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.