Economy Watch: Existing Home Sales; Thanksgiving Travel

Total existing U.S. home sales rose 1.5 percent in October month over month. A greater number of Americans are predicted to travel this year for Thanksgiving.

Total existing U.S. home sales rose 1.5 percent to an annualized rate of 5.26 million units in October from 5.18 million in September, the National Association of Realtors reported on Thursday. Sales are at their highest annualized pace since September 2013 (also 5.26 million) and are now above year-over-year levels (2.5 percent from last October) for the first time since last October.

“Sales activity in October reached its highest annual pace of the year as buyers continue to be encouraged by interest rates at lows not seen since last summer, improving levels of inventory and stabilizing price growth,” NAR chief economist Lawrence Yun said in a statement. “Furthermore, the job market has shown continued strength in the past six months.”

NAR also said that total housing inventory at the end of October fell 2.6 percent to 2.22 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace, which is the lowest since March (also 5.1 months). Unsold inventory is now 5.2 percent higher than a year ago, when there were 2.11 million existing homes available for sale.

Americans Traveling for Thanksgiving in Greater Numbers This Year 

AAA predicts that 46.3 million Americans will travel 50 miles or more from home during the Thanksgiving weekend, the highest volume for the holiday since 2007 and a 4.2 percent increase over 2013. Almost 90 percent of travelers (41.3 million) will take a road trip and thus enjoy the lowest gas prices in nearly four years. For the purposes of the organization’s survey, the results of which were released on Thursday, the Thanksgiving holiday travel period is Wednesday, Nov. 26 through Sunday, Nov. 30.

Air travel for Thanksgiving is also expected to be at the highest level since 2007, with 3.55 million Americans taking to the skies. Travelers will encounter moderately higher prices for airfares—1 percent higher than last year–while mid-range hotels will be 8 percent more expensive and car rentals 10 percent more. The average distance traveled this Thanksgiving will be 549 miles roundtrip, and Americans will spend an average of $573 during the holiday weekend, according to AAA.

“Americans are more optimistic about the future as improvements in several key economic factors, including employment, GDP and disposable income, are boosting consumer confidence and the desire to travel,” AAA’s Beth Mosher noted in a statement. “Lower prices are increasing disposable income and enabling families to carve out more money from household budgets for travel this Thanksgiving.”

Wall Street had a modest up on Thursday, with the Dow Jones Industrial Average up 33.27 points, or 0.19 percent. The S&P 500 gained 0.2 percent and the Nasdaq advanced 0.56 percent.