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American existing home sales head north
In November, American home sales suddenly tacked on, although recorded their greatest annual dive for 7-1/2 years due to the fact that the housing market was still plunged in weakness.
There are fears that the persistent housing market weakness could impact the broader economy that is still being backed by firm consumer spending.
The decreasing housing market isn’t anticipated to discourage the main American financial institution from lifting interest rates when Fed policy makers wrap up a two-day policy gathering on Wednesday. Eventually, the Fed has had borrowing costs ramped up three times in 2018.
As some experts pointed out, the trend in US housing is speeding down because affordability takes a bite.
According to the National Association of Realtors, existing home sales ascended by 1.9% to a seasonally updated annual rate of nearly 5.32 million units in November. As for October's sales tempo, it wasn’t updated, sticking with 5.22 million units.
For two straight months sales have managed to leap.
Market experts had hoped existing home sales would slip by 0.6% to 5.20 million units last month.
However, in November existing home sales headed south by 7% from last year, which turns out to be the largest annual sink since May 2011.
For the first 11 months, sales have dived by 2.3% in contrast with the same period of 2017.
The housing market is being impacted by higher mortgage rates, to say nothing of land as well as labor shortages that have provoked tight inventory. Despite house price inflation has speeded down considerably, it keeps outpacing wage surge, thus scaring away some first-time homebuyers.
Monday’s poll demonstrated that in December confidence among American single-family homebuilders dipped to more than a 3-1/2-year minimum. By the way, in November, single-family homebuilding sank to a 1-1/2-year minimum.
We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
The US NFP report will come out on January 8 at 15:30 MT time.
The market optimism waned amid stricter restrictions to control rising coronavirus infections. S&P 500 and Nasdaq dropped from the all-time highs, while the USD jumped higher.
S&P 500 skyrocketed to the all-time high on optimism that Biden’s fiscal stimulus will support economic growth and boost corporate earnings.
PMI reports from the EU, the UK, and the USA will be released during the day!