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Data released today showed that existing home sales rose 1.9% during October. Lower mortgage rates continue to boost sales, which are up 4.6% over the year, explained analysts at Wells Fargo. They point out inventories are shrinking once again, however they see some upward pressure on home prices.

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“The housing market continues to move in the right direction thanks to lower mortgage rates. Existing home sales rose a solid 1.9% in October to a 5.46 million-unit pace. Resales are up 4.6% over the past 12 months. Single-family resales, which increased 2.1%, accounted for most of the gain.”

“While the recent improvement in resales is encouraging, the gains over the past few months represent a reversal of last year’s higher mortgage rate-induced slide. Furthermore, the recent improvement likely reflects a return to the slow and steady upward trajectory which has become a hallmark of this expansion.”

“With fewer homes for sale, prices are rising a little more briskly. The median existing single-family home price rose 6.2% year-over-year to $273,600, the fastest increase since July 2017. This presents a fundamental challenge, as 38.2% of single-family sales during October were priced between $100-250K, more than any other price range.”

“While mortgage rates have ticked higher in recent weeks, they remain historically low, averaging 3.7% during October, and will likely continue to support demand for resales. Mortgage applications for purchase have risen solidly in three of the past four weeks and are up 7.3% over the past year as of November 15.”