WASHINGTON (11/21/13)--Prices are on the rise, but it's not exactly a seller's market.
A diminished market supply pushed home prices up, but home sales continued to decline for the second month running in October, according to the National Association of Realtors.
Total existing home sales--completed transactions of single-family homes, townhomes, condominiums, and co-ops--fell 3.2% last month, to 5.12 million from 5.29 million in September.
The national median home price for all housing types clocked in at $199,500 in October, up 12.8% from October 2012--the 11th consecutive month of double-digit year-to-year increases.
Total sales were also higher on an annual basis by 6%. In October 2012, 4.83 million homes were sold.
Median time on the market was lower in October than it was the year before--down to 54 days from 71 days--but higher than the 50 days measured in September.
A major driving force behind the reduced stock of homes is the drop in distressed sales. Foreclosures and short sales accounted for 14% of all transactions in October--they constituted a quarter of all sales in October 2012. Total housing inventory at the end of October dropped on a monthly basis by 1.8% to 2.13 million.
The NAR said that despite historically low interest rates, credit remains "unnecessarily restrictive," with qualified buyers being denied loans. First-time buyers made up 28% of purchases in October, which is unchanged from September, but down from 31% in October the year before.
The biggest regional one-month drop in existing sales happened in the West, where the measure fell by 7.1%. In the Northeast, Midwest and South, existing sales dropped from September to October by 2.9%, 1.6% and 1.9% respectively.
WASHINGTON (11/21/13)--Members of the Federal Reserve's policymaking body, the Federal Open Market Committee, said they would consider slowing the pace the Fed's bond-buying program "in the next few meetings," according to the FOMC minutes released Wednesday afternoon.
In their discussion of monetary policy at the Oct. 29-30 meeting, the committee noted that the economy had changed little since the September meeting, and all members but one judged that it would be wait for more evidence that the economy is improving before adjusting slowing the pace of its $85-billion-a-month program of buying back Treasuries and mortgage-backed securities, a policy known as quantitative easing, or QE3.
"They generally expected that the data would prove consistent with the Committee's outlook for ongoing improvement in labor market conditions and would thus warrant trimming the pace of purchases in coming months," the minutes said. "However, participants also considered scenarios under which it might, at some stage, be appropriate to begin to wind down the program before an unambiguous further improvement in the outlook was apparent."
In the view of one committee member the improvement in the economy indicated that the continued easing of monetary policy at the current pace was no longer necessary. Two other members commented that it would be important to continue laying the groundwork for a reduction in purchases through public statements and speeches.
Committee members generally expressed reservations about the possibility of introducing a rule that would adjust the pace of asset purchases automatically based on a single variable such as the unemployment rate or payroll employment, the minutes said.
The committee also considered whether to comment whether the effects of the temporary government shutdown had made economic conditions more difficult to assess, but determined that such comments might overemphasize the role of the shutdown in the committee's policy deliberations.