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.