US Home Sales Hit All Time High in 6 ½ Years

US home sales hit an all time high in 6.5 years August 2013, causing a surge in homebuyers to re-enter the market. Buyers are not only taking advantage of the newly rebounding prices, but also the cheap borrowing costs among mortgage rates.

The National Association of Realtors reported that home sales increased 1.7 percent Thursday, September 19, 2013, to an annual rate of 5.48 million units sold in August. This rate is the highest it has been since February 2007. This housing recovery has helped the economy resurface by bolstering household finances and supporting consumer spending.

Mortgage rates have begun to rise over the past few months, pushing buyers to close deals as fast as possible to lock into the current lows. The rate for a 30-year fixed rate loan was 4.5 percent, as of September 19, 2013.

The rate in home buying has resulted in a moderate housing shortage. Lawrence Yun, NAR chief economist, stated “There’s an ongoing housing shortage. I don’t anticipate this shortage to go away.”

The months’ supply of housing (4.9 months of supply) remained below the 6 months that is normally considered as a healthy balance between supply and demand.

The median home sales price in August rose 14.7 percent from this time last year, fetching a price of $212,100.

Furthermore, distressed properties, foreclosures and short sales, which typically occur at deep discounts, accounted for approximately 12 percent of overall sales last month, the lowest since NAR began tracking the data in 2008.

In August 2013, U.S. home sales reached a six-and-a-half-year high, with a surge of homebuyers returning to the market. These buyers not only took advantage of the newly fluctuating prices but also capitalized on low mortgage rates.

A report from the National Association of Realtors indicated that home sales rose 1.7 percentage points on Thursday, September 19, 2013, reaching an annualized growth rate of 5.48 million units sold in August. This is the highest growth rate since February 2007. The recovery in the housing market has contributed to the economic recovery by helping to support household finances and encourage consumer spending.

Mortgage rates have also increased in recent months, prompting homebuyers to close their deals sooner to take advantage of the current low rates. As of September 19, 2013, the fixed rate for a 30-year mortgage was 4.5%.

Low interest rates on home purchases have also contributed to a moderate shortage of housing inventory. Lawrence Yun, chief economist at the National Association of Realtors, stated, “I don’t think the current housing shortage is going to disappear.”

A housing supply of 4.9 months or less than 6 months is generally considered a healthy supply-demand balance.

In August, the average selling price of a mid-sized home increased by 14.7 percentage points compared to the same period last year, reaching $212,100.

In addition, non-performing assets, foreclosures, and short-term sales, which typically occur at large discounts, accounted for about 12% of total sales last month, the lowest level since the National Association of Real Estate began tracking this data in 2008.