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24 December 2020

US Home Sales Fall After Consistent Gains

Home sales in the US declined after five straight monthly gains as a reduction in supply pushed prices beyond many buyers’ limits, with COVID-19’s effect on household incomes also starting to hit the housing market. While the decline was expected, with economists forecasting a -1% reduction in sales, the actual number was much lower at -2.5%, approximately 170,000 fewer homes sold in November versus in 2019.
Up until now, the housing market in the US (and in much of the developed world) has remained relatively resilient when compared to other sectors of the economy such as travel and business activity. However, this decline highlights the cracks starting to form in the US economy and the widening gap between markets and reality. Stock markets, particularly in the US have continued their upwards march to all-time highs, driven by low interest rates and fiscal stimulus, however, this continued rise alongside the poor statistics emerging from the economy highlight the need for further stimulus from the US Government as well as widespread vaccine roll outs.
This will come as a disappointment to the 1.4m registered US realtors who have enjoyed a surprisingly good few months with fewer travel costs. However, those areas and employees who are operating in the inner city are likely to have been hit the hardest, as cities such as New York and San Francisco which have experienced a significant decline in demand as buyers head to the suburbs and countryside to work from home in areas with lower costs and fewer COVID-19 cases.
US Home Sales Fall After Consistent Gains
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