KNOXVILLE, Tenn. — Sales of new homes reveal much about the health of the construction and materials industries, but a University of Tennessee economist says existing-home sales provide far more important information.
Sales of previously-owned homes jumped 6.9 percent in March to the highest level in more than two years, the National Association of Realtors reported last week.
Rising mortgage rates caught up with home buyers in March, trimming sales of new houses by 7.6 percent to the lowest level in 10 months.
“Existing-home sales give us a pretty good indication of consumer confidence and buyers’ perceptions of job security,” Dr. Matt Murray said Thursday.
“Looking at existing-home sales is very important to understand how vibrant the real estate market really is,” he said.
Murray, an analyst with the UT-Knoxville Center for Business and Economic Research, said there are more existing homes than there are newly constructed homes coming on the market.
Analysts say that for every 1 percentage point increase in rates, up to 300,000 families are priced out of the market.
Existing-home sales in the South increased 5.4 percent last month. Buyers were responding to low mortgage rates. The median price of those homes was $99,500.
Contact: Matt Murray (423-974-5441)