U.S. home sales hit 10-year high

Americans shrugged off rising mortgage rates and bought existing homes in January at the fastest pace since 2007. Home sales rose 3.3% in January from December to a seasonally adjusted annual rate of 5.69 million, reveals U.S. data from the National Association of Realtors. However, sales remain 21.5% below the all-time peak in 2005, says […]

By Staff, with files from The Associated Press | February 22, 2017 | Last updated on February 22, 2017

1 min read

Americans shrugged off rising mortgage rates and bought existing homes in January at the fastest pace since 2007.

Home sales rose 3.3% in January from December to a seasonally adjusted annual rate of 5.69 million, reveals U.S. data from the National Association of Realtors.

However, sales remain 21.5% below the all-time peak in 2005, says Derek Holt, vice-president and head of capital markets at Scotiabank, in an economics note. And, though sales of single-family homes were up 2.6% from January 2016, the volatile condo sector drove much of the gain. Condo sales were up more than 8%.

A good sign, though, is that first-time buyers represent one-third of the market, says Holt, and foreclosures account for only 7% of total sales.

By some measures, the housing market has fully recovered from the bust that began in 2006. Yet its newfound health is creating its own set of challenges.

Just 1.69 million homes were on the market nationwide in January, near the lowest level since records began in 1999.

Read: New homes inventory in GTA at ‘crisis levels’

Last year, low mortgage rates helped offset rising home prices. Now, both are rising, which could hamstring sales in the coming months.

Also read:

GTA house prices could rise 16% in 2017

Older clients loaning to kids? Discuss these 3 questions