U.S. existing home sales rise above expectations in October

U.S. existing home sales rose in the month of October, rising for the first time since March. Sales were up 1.4 percent to 5.22 million units. The headline print came in a bit above market expectations of a rise of 1 percent. Nevertheless, sales dropped 5 percent from the 5.5 million units sold in October 2017. Single-family sales rose 0.9 percent in the month after falling 3.4 percent in the prior month, while sales in condo/co-op segment rose sharply by 5.3 percent.

Home re-sales rebounded throughout most regions, rising 2.8 percent sequentially in the West, 1.9 percent in the South, and 1.5 percent in the Northeast. On the contrary, sales dropped 0.8 percent in the Midwest, after holding flat in the prior month.

Several homes available for sale dropped to seasonally unadjusted 1.85 million units from 1.88 million in September. That signified that inventories rose 2.8 percent from the same month last year. Homes typically remained on the market for 33 days, up from 32 days in September but down from 34 days a year ago. Almost half of the homes sold in October were on the market for less than a month.

Median existing homes prices rose 3.8 percent year-on-year, the same as last month but down from almost 6 percent at the start of the year. Following a six month break, buyers finally stepped back into the market and home re-sales took a significant positive step in October. However, the overall activity is still down some 5 percent year-on-year. The key question now is whether October marks the beginning of a new and rebounded trend, or simply a brief pause to an underwhelming short-term outlook, noted TD Economics in a research report.

Decelerating home price growth, which has eased to 3.8 percent from almost 6 percent at the beginning of the year, will help do its part in limiting the hit to affordability as rates rise further.

“Moreover, mild improvements in the number of homes for sale in recent months also mark a positive step. But, inventory levels are still historically low and suggest that lack of affordable supply will remain a constraint”, added TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bullish at 51.6991. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex