Magazine article Insight on the News

U.S. Home Sales Skyrocket Past All-Time Record. (Economics)

Magazine article Insight on the News

U.S. Home Sales Skyrocket Past All-Time Record. (Economics)

Article excerpt

Sales of existing homes soared an unprecedented 16.2 percent to a record 6.04 million units in January as historically low mortgage rates, rising consumer confidence and mild weather prompted Americans to buy houses even during a recession.

"The housing market is still on fire," says Joel L. Naroff, president and chief economist at Naroff Economic Advisers. "Okay, mild weather helped, but let's get real: People don't go out and buy houses if they are worried about the future, even if mortgage rates are fairly low and the sun is shining brightly. This was a clear vote of confidence in the economy."

Thirty-year fixed mortgages are at historic lows, averaging 7 percent in January, down from an average of 7.07 percent in December 2001, and falling to an average 6.81 percent in February. House prices were higher than a year ago, however. The median price was $151,100 in January, up 10.2 percent from a year earlier, though down from $153,000 in December 2001.

Economists said the positive housing data shows a step toward an overall economic recovery. Strong housing sales are important to the economy because new home owners tend to spend money on their residences, buying everything from furniture and new televisions to decorations, paint and new toilets. …

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