WASHINGTON (AP) – Americans bought homes in October at the fastest pace in nearly decade, helped out by low mortgage rates that have since started to climb following the presidential election of Donald Trump.
The National Association of Realtors said Tuesday that sales of existing homes rose 2 percent to a seasonally adjusted annual rate of 5.6 million. Sales reached their strongest pace since February 2007, a sign that the market is still healing from the collapsing prices and foreclosures that ignited the 2008 financial crisis.
A stable job market and historically cheap borrowing costs have spurred demand from homebuyers this year. But sales growth has been tempered somewhat by accelerating prices and a shortage of properties on the market. Sales gains could possibly slow in the coming months as rising mortgage rates are making home loans more expensive.
Falling mortgage rates helped boost sales for much of the year, but rates surged following this month’s presidential election. The increase means that yearly debt payments for a median-priced home would increase by more than $500 on average for people attempting to buy homes in November and December.
Investors expect the federal budget deficit to rise in a Trump administration, causing the yield on 10-year U.S. Treasury notes to reach roughly 2.3 percent.