Please ensure Javascript is enabled for purposes of website accessibility

Existing Home Sales Rise 1.7% on Mortgage Rate Rush

By Justin Loiseau - Sep 19, 2013 at 3:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

August's number is the highest level since February 2007.

Sales of existing homes set a new recovery high in August, according to a National Association of Realtors (NAR) report released today. Total existing home sales increased 1.7% month-over-month to a seasonally adjusted annual rate of 5.48 million.

After jumping up 6.5% for July in what the NAR saw as a move by consumers to get in ahead of rising mortgage rates, this month's report could tell a similar tale. August's number is the highest level since February 2007 as buyers rushed to close deals before mortgage rates increased further. (August sales reflect contracts signed in June and July, when mortgage rates were rising steadily.)

"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 NAR Chief Economist Lawrence Yun in a statement today. "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."

Analysts hadn't expected the rush to last as long, having predicted a 5.26 million seasonally adjusted annual rate for August. Compared to 12 months ago, sales are up 13.2%.  The numbers include completed transactions on single-family homes, townhomes, condominiums, and co-ops.

For the same month, the housing inventory increased 0.4% which, at the current sales rate, represents a 4.9-month supply of existing homes, down from July's 5.0 month supply.

As sales headed higher again, the median home price clocked in at $212,000. Compared to a year ago, August's price tag is 14.7% pricier, and represents the largest year-to-year gain since 2005. The median time on the market was 43 days, up one day from July but down 27 days from August 2012's market.

-- Material from The Associated Press was used in this report.

link

Fool contributor Justin Loiseau has no position in any stocks mentioned. You can follow him on Twitter @TMFJLo and on Motley Fool CAPS @TMFJLo.

The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.