Sales of existing U.S homes pushed upward in August, reaching a six-and-a-half year high, according to the National Association of Realtors, but the trend may slow in the fall if market conditions continue their track.
The NAR reported that total existing-home sales rose by 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August, up from 5.39 million in July. Compared with the year before, sales were up 13.2 percent. August marks 26 straight months of year-over-year sales increases.
Prices rose as well as the number of distressed properties for sale dropped. Foreclosures and short sales made up just 12 percent of all sales in August, down from 15 percent in July and 23 percent in August 2012. That helped raise the median existing home price to $212,100, up 14.7 percent from the year before.
Housing inventory rose just 0.4 percent to 2.25 million existing homes. At the current sale pace that represents a 4.9-month supply down from 5.0-month supply in July. Some of the largest drops in inventory were found in Naples, Fla., where homes for sale fell by 23.5 percent, Detroit, with a 23.3 percent decrease and Boston, with a 20.7 percent fall.
Interest rates kept climbing in August with the average rate on a 30-year fixed rate conventional loan rising to 4.46 percent, the highest point in over two years and up from 4.37 percent in July.
“Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” said NAR chief economist Lawrence Yun in a statement. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”