The housing market built up more strength in July, according to the National Association of Realtors (NAR). Its monthly report on existing home sales pegged the year-over-year gain at 10.3%. Homes sold at an annual rate of 5.59 million during the month, up 2% compared with June.
“It’s been a good selling season for Realtors,” said Pat Newport, an analyst and director of long-term forecasting for IHS Global Insight, a company that looks at current economic data and predicts future trends.
He cites several positive economic trends that have supported home sales, including job gains and rising GDP. Home construction is also percolating, especially in the South and West. Overall, housing starts were up 10% year-over-year in July, according to the Department of Commerce.
Many house hunters are buying while homes are still affordable, according to Lawrence Yun, NAR’s chief economist.
“The prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now,” he said.
The median home price in July was $234,000, slightly below June’s figure but up 5.6% compared with a year earlier. It marked the 41st consecutive month of year-over-year price increases.
With the nation still slowly emerging from a recession triggered by a housing downturn, Newport sees steady progress for the housing market, but thinks it still could take another two or three years to fully rebound to normal.
Realtors are, on the whole, confident, according to a recent survey of their ranks by NAR. About 95% expect their sales volume to increase or stay the same over the next year.
And affordability is still benefiting from low mortgage costs. The average interest rate for a 30-year, fixed-rate mortgage fell below 4% by the end of the month. That translates into a monthly payment of less than $480 for every $100,000 borrowed. For many Americans, buying can be cheaper than renting.
The West region was the nation’s most expensive. Home prices there hit $327,400 during July, up 8.4% year-over-year, as sales rose 11.3% compared with July 2014. In the Northeast sales grew 9.4% and prices went up 1.3% to $277,200.
The South boasted a price gain of 7% to $203,500 as sales grew 9.6%. The Midwest was the least expensive region with a median of $186,000, a 6.6% rise compared with a year ago. Sales there jumped 10.9%.
To get a glimpse at what’s out there, check out this Clinton, Conn. home (pictured above), where $300,000 gets you two bedrooms, a lovely yard and a white-picket fence.
