Economy

Buyers Push Housing Re-sale to 6 1/2 Year High

September 19, 2013

Buyers looking to snag a low mortgage before rates rise too high pushed home re-sales to its highest pace since February 2007. Existing home sales rose 1.7 percent in August to a seasonally adjusted annual rate of 5.48 million from 5.39 million in July. The increase is likely to be temporary however, said Lawrence Yun, National Association of Realtors chief economist.

“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 Yun. “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.”

A still tight housing inventory increased in August by 0.4 percent to 2.25 million existing homes for sale—a 4.9 month supply at the current sales pace, down from a 5 month supply in July and still below the 6 month balance point between supply and demand.

Median home price increased to $212,100, up 14.7 percent from the same period last year. Limited inventory has pushed selling prices up, with 17 percent of homes sold above the asking price in August said Yen. Mortgage rates for a 30-year fixed-rate mortgage climbed 4.46 percent in August from 4.37 percent in July, according to Freddie Mac.

Regionally, sales in the Northeast were unchanged, the South was up 3.8 percent and the Midwest gained 3.1 percent. Sales in the West declined by 2.3 percent but tight inventory pushed the median price to $287,500—well above the median price in the other regions and the national average.