US Existing Home Sales: Pace of improvement may soon slow – Wells Fargo

Existing home sales rose unexpectedly in October by 4.3%, to the highest level since 2006. Analysts at Wells Fargo expect this strong pace of sales to continue, but they warn the pace of improvement may soon slow.

Key Quotes: 

“The 4.3% monthly gain brings existing sales to a 6.85-million unit pace, well ahead of expectations and the fastest since 2006. Single-family sales rose 4.1%, while condo sales increased 5.8%. Sales continue to be bolstered by low mortgage rates and the need for more space to adapt to new COVID norms.”

“While we expect this strong pace of sales to continue, the pace of improvement may soon slow. Pending home sales, which lead existing sales by a month or two, fell 2.2% in September. Similarly, mortgage purchase applications have started to come back down from the lofty heights reached this summer.”