Markets & Economy

Existing-home sales drop for 2nd straight month: NAR

NAR's chief economist says 'erosion in buying power' curtailing purchases

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Existing-home sales fell for the second straight month in October as tight inventory continued to hamper home purchases, the National Association of Realtors reported. “The erosion in buying power is dampening home sales,” NAR Chief Economist Lawrence Yun said in a statement. “Moreover, low inventory is holding back sales while at the same time pushing up home prices in most of the country. More new home construction is needed to help relieve the inventory pressure and moderate price gains.” Existing-home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.12 million in October from 5.29 million in September, according to NAR. But the trade group said that on an annual basis they increased 6 percent. Capital Economics said in a report on the data that the dip in home sales is a "legacy" of a 120 basis point increase in mortgage rates in the four months leading up to September, driven by expectations that the Fed would begin to wind down its stimulus pro...