Sales of previously owned homes in the US unexpectedly hit a 19-month high in October despite the low inventory and rising prices.
Accordingly, it posted a 0.80% gain to a seasonally adjusted annualized rate of 6.34 million units.
Remarkably, the latest figure surpassed the previous data of 7.0% to 6.29 million houses.
Additionally, it marked its second straight monthly increase, surpassing sales from their highest level since January.
Subsequently, this measure mirrored the closed sales for existing single-family homes and condominiums in October.
In line with this, this included contracts in August and September, whereas the closing process can take one to two months on average.
At present, Realtors predicted a full-year sales of over 6.00 million, pushing US home sales to their highest number since 2006.
Consequently, economists further mentioned that sales continue to remain strong as job additions jump.
At the same time, they noted the increase in investors in the market, mainly driven by soaring rents for single-family homes.
Correspondingly, investors contributed 17.00% of October buyers, which is 13.00% higher in September. In addition, all cash payers made up 24% of the group.
Then, first-time consumers represented 29.00% of sales, slightly lower than 32.00% a year ago.
US Home Inventory Remains Tight
However, the supply of existing US homes for sale remained weak, weighing heavily on the market.
In the recent report, a total of 1.25 million homes were available for sale, which is down 12.00% from a year ago.
At the current sales pace, the US has a 2.4-month supply of homes. This is lower than the balanced market, which has roughly a 6-month supply.
Also, surging home prices implicated the lower-income buyers as more inventory is available at the higher end of the industry.
Moreover, US houses priced between $250,000 and $500,000 in October declined 2.00% from a year ago. The downturn came as the short supply did not meet the rising demand.
Meanwhile, properties valued at $500,000 to $750,000 climbed 18.00% from a year ago. Then, those costing more than $1.00 million rose 31.00%.
Furthermore, this emphasized the need for more homes for sale on the market to supplement the US housing stock.