In September, the resale of U.S. homes reached a one-year high. This has been the latest sign that the housing market is recovering and attempting to get back inline. Another sign of strength within the economy was displayed with an increase in activity for the service sector in the mid-Atlantic region of the nation. National Association of Realtors reported that the sale of existing homes increased by 2.4%, more than 5 million units annually. The increase was also higher than the expectations of economists. The growth went beyond reversing the decline that the market had in August.
With all of its positive attributes, the sales were still 1.7% lower than the sales they had in September 2013. Due to limited wage growth and tight credit standards, the market’s recovery is moving slowly. The housing market keeps fighting to move forward, after their activity came to a standstill during the last 6 months of 2013 that followed a rise in mortgage rates. After the U.S. Treasury had a large drop in debt yields, the mortgage rate had a drop.
The data from housing allowed the U.S. stocks to increase their gains. There was an increase of 1.3% for the housing sector index (.HGX). KB Home increased by 2.45% and Pulte Group gained 2.18%. As the U.S Treasury dropped in debt, the U.S. dollar had a major increase and outperformed numerous currencies. Although sales of homes increased in September, a major part of the housing market’s recovery, first-time buyers had to sit on the sidelines. For three months straight, the first-time buyers made up for 29% of the overall sales. This is below the ideal percentage of real estate agents and economists, which is 40 to 45%. Mesirow Financial’s chief economist, Diane Swonk stated that the market needs more first-time home buyers that are able and willing to purchase a home without help from credit that excessively easy.