Sales of existing homes jumped 6.5% to a seasonally adjusted annual rate of 5.39 million for July, according to a National Association of Realtors (NAR) report released today.
After dropping off a revised 1.6% for June, analysts had expected a slight 1.8% increase, but their predictions proved too conservative. Compared to July 2012, sales are up 17.2%. The numbers include completed transactions on single-family homes, townhomes, condominiums, and co-ops.
For the same month, the housing inventory also increased, expanding 5.6% to 2.28 million existing homes. At the current sales rate, this represents a 5.1-month supply of existing homes, unchanged from June's level.
Buyers have been purchasing previously occupied homes at an annual pace above 5 million for three straight months. The last time that happened was in 2007. Sales are far above the 3.45 million pace of July 2010, the low point after the housing bubble burst. Analysts generally think a healthy sales pace is roughly between 5 million and 5.5 million.
NAR Chief Economist Lawrence Yun thinks this latest shopping spree might be the last for a while if mortgage rates continue to rise. In a statement he said:
Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines. The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers.
As sales headed higher, the median sales price clocked in at $213,500 for the 17th straight month of year-over-year increases. Compared to a year ago, this month's price tag is 13.7% more expensive. The median time on the market increased five days from June to 42, and is 39% faster than July 2012's market time.
-- Material from The Associated Press was used in this report.