19 September 2013 17:05 [Source: ICIS news]
WASHINGTON (ICIS)--US sales of existing homes rose by 1.7% in August from July, the National Association of Realtors (NAR) said on Thursday, marking the highest level in more than six years and running well ahead of the year-earlier pace.
In its monthly report, the NAR said that the number of existing homes sold last month reached a seasonally adjusted annual rate of 5.48m compared with the July measure of 5.39m.
August’s sales activity also was 13.2% ahead of the pace seen in the same month last year, the report said.
“Sales are at the highest pace since February 2007, when they hit 5.79m, and have remained above year-ago levels for the past 26 months,” the association said.
In 2007 the US housing bubble was well along in its deflation and the beginning of a years-long depression in the housing sector was well under way.
While the August sales gain was welcomed, NAR cautioned that those levels of activity might not be maintained.
NAR chief economist Lawrence Yun said that the market “may be experiencing a temporary peak”.
“Rising mortgage interest rates pushed more buyers to close deals,” he said, “but monthly sales are likely to be uneven in the months ahead from several market frictions.”
Yun said that rising mortgage loan rates mean that housing affordability is not as favourable as it was over the last year, “and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase”.
According to Freddie Mac, the congressionally chartered secondary mortgage market, the national average for a 30-year fixed rate mortgage (FRM) rose to 4.46% in August from 4.37% in July and has reached its highest level since July 2011 when it was 4.55%.
A year ago in August 2012, a 30-year FRM loan was available at 3.6%, the NAR noted.
In addition, Yun said that the number of available existing homes for sale is limited in many parts of the country.
The rise in existing home sales comes amid a mix of housing market data. Construction of new single-family homes shot up by 7% in August, but builder confidence was flat in September and pending home sales saw a second month of declines.
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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