5 Stocks To Buy As Home Sales Surge To 10-Year High In Q1

Further evidence that the housing market has strengthened this year emerged on Monday following the release of home sales data for the first quarter. According to the National Association of Realtors, home sales touched their highest level in 10 years. This is a clear indication that an increase in prices and mortgage rates have failed to deter new buyers.

To add this fresh sign of optimism, home-builders’ confidence increased in May. The level achieved this month was also the highest in a decade. This is why this is a good time as any to benefit from the housing sector’s growth by investing in stocks gaining from such trends.

Q1 Existing Home Sales Reach 10-Year Peak

During the first quarter, total existing home sales increased by 1.4% to a seasonally adjusted rate of 5.62 million. This annual pace is the highest recorded since the corresponding period in 2007, when the metric had touched 5.66 million.

Additionally, the figure was higher than the pace of 5.36 million recorded in the same period last year as well as the fourth quarter of last year. In the fourth quarter of 2016, the metric touched 5.36 million, which indicates a 5% improvement has now occurred.

Price Rise Raises Concerns, Homebuilder Sentiment Rises

The increase in home sales was accompanied by a significant rise in prices. The national median home price increased by 6.9% from the year-ago quarter to $232,100. This marks the highest gain in home prices in almost two years.

While a section of market watchers believe rising home prices and mortgage rates will deter new home buyers, others feel differently. Optimists have taken the view that millennials entering the housing market have been powering recent gains and will continue to do so.

Such sentiments have been borne out by the latest reading of the National Association of Home Builders/Wells Fargo Housing Market Index. This index of home-builder sentiment increased from 68 in April to 70 in May. The index had hit 71 in March, the highest level witnessed since Jun 2005.

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