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US existing home sales rise more than expected in October
[WASHINGTON] US home sales increased more than expected in October and house prices rose at the fastest pace in more than two years amid lower mortgage rates and a shortage of properties for sale.
The National Association of Realtors said on Thursday that existing home sales rose 1.9 per cent to a seasonally adjusted annual rate of 5.46 million units last month. September's sales pace was downwardly revised to 5.36 million units.
Economists polled by Reuters had forecast existing home sales rising 1.4 per cent to 5.47 million units.
The US Federal Reserve has cut interest rates three times this year, which has bolstered the housing market by lowering mortgage rates.
Last week, Fed Chair Jerome Powell reiterated that he and his colleagues see a "sustained expansion" ahead as likely for the country's economy, with the full impact of recent interest rate cuts still to be felt and low unemployment boosting household spending.
The central bank's reduction in borrowing costs has caused the 30-year fixed mortgage rate to drop more than 130 basis points since last November's peak to an average of 3.66 per cent, according to data from mortgage finance agency Freddie Mac.
Other factors continue to weigh on housing though, including a chronic lack of properties for sale, which has inflated prices and kept many buyers on the sidelines.
There were 1.77 million homes in the market last month, a decline of 4.3 per cent compared to a year ago.