US Existing Home Sales Rise to 10-Month High in December

The U.S. housing market showed signs of resilience in December, with existing home sales rising to a 10-month high, according to data released by the National Association of Realtors (NAR). The seasonally adjusted annual rate of existing home sales climbed to 4.15 million, the highest level since February 2022. This increase was driven by a combination of factors, including a growing economy, increased job creation, and a rise in consumer confidence. However, the most significant factor was the stabilization of mortgage rates between 6% and 7%, which helped to ease the affordability hurdle for buyers.

The rise in existing home sales comes as a welcome surprise, given the headwinds facing the housing market in recent months. The Federal Reserve's aggressive rate hikes have pushed mortgage rates higher, making homeownership less affordable for many Americans. Additionally, the ongoing supply chain disruptions and labor shortages have contributed to higher construction costs, further exacerbating affordability issues.

Despite these challenges, the housing market has shown remarkable resilience. The increase in existing home sales in December suggests that buyers are still eager to enter the market, despite the higher mortgage rates. This is a testament to the strong demand for housing, driven by factors such as population growth, job creation, and the desire for homeownership.

However, it is important to note that the housing market remains fragile, and any further increases in mortgage rates or economic uncertainty could dampen demand. The Federal Reserve has indicated that it will continue to raise interest rates in the coming months to combat inflation, which could put additional pressure on the housing market.

In conclusion, the rise in existing home sales in December is a positive sign for the housing market, but it remains to be seen whether this trend will continue in the face of ongoing economic uncertainty and potential interest rate hikes. As always, investors should remain vigilant and monitor the housing market closely for any signs of a slowdown or recovery.

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