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The existing home sales in the United States hit to their highest level in a year in September, indicating smooth recovery of the housing market.
The report released by the National Association of Realtors on Tuesday showed that the existing home sales increased 2.4 percent to an annual rate of 5.17 million units last month.
This is the strongest reading recorded since September 2013.
Some economists had, however, forecasted the rise in the existing home sales to a 5.10 million unit pace in September from 5.05 million unit pace recorded in August. But the sales were down 1.7 percent against the figures of September last year.
Last week’s data showed a recovery in home building in September this year. Market analysts said that the housing sector showed a slow regain in its footing after the activity stopped in the second half of 2013 as a result of a run-up in mortgage rates.
The sluggish wage growth has continued to hobble the housing sector, the analysts said.
According to them, poor growth in wages has sidelined the first-time buyers who are a critical component for a sustainable recovery of the housing market.
The official reports suggest that the housing sector recovery has been driven by the investors, mainly those who were interested in buying distressed properties and converting them into rental units. But, economists said that those investors are now withdrawing from the market and they accounted for only 14 percent of transactions in September, which was 19 percent in the same month last year.
Millan Mulraine, deputy chief economist at TD Securities in New York, said, “The overall momentum in the housing market recovery remains relatively weak. That said, with buying conditions still conducive and the labor market recovery continuing to progress, the outlook for the housing sector remains favorable.”
In Spetmber, the unsold homes inventory on the market rose six percent from a year ago to 2.30 million. At this sales pace, 5.3 months is expected to be taken for the clearance of the houses from the market, which is down from 5.5. months in August.