US Existing Home Sales at Highest Level Since 2007

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Existing home sales in the U.S. reached a six-and-a-half year high in August, while the national median home price increased for the ninth consecutive month, according to data released today by the National Association of Realtors. 

Total existing home sales including single-family, townhomes, condominiums and co-ops increased 1.7 percent to a seasonally adjusted rate of 5.48 million in August compared to 5.39 million July. The number is 13.2 percent higher than the 4.84 million in August 2012. 

Existing home sales are at the highest pace since February 2007 when they reached a rate of 5.79 million, NAR reports. However, the market may be witnessing a temporary peak.  

"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," Lawrence Yun, NAR chief economist said in the release.  "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."

Yesterday the Mortgage Bankers Association reported an 11.2 percent increase in mortgage applications, while increasing interest rates create concern. 

Total housing inventory increased 0.4 percent to 2.25 million existing homes in August, representing a 4.9-month supply at the current sales price. The supply is down from the 5.0-month supply the previous month, leading to higher home prices, the group reports. 

The national median existing-home price for all types was $212,100 in August, a 14.7 percent increase from last year, representing the strongest yearly gain since October 2005.  

Distressed homes accounted for 12 percent of sales in August, down from the 15 percent in July. First-time buyers accounted for 28 percent of sales, down from 29 percent in July and lower than the 31 percent last year. Meanwhile, all-cash sales totaled 32 percent of transactions, up from 31 percent in July and 27 percent last year.