Mortgage rates boosted US home sales 1.3 percent
US home sales rose to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of buying.
WASHINGTON (AP) — US home sales rose 1.3 percent in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying.
The National Association of Realtors said Thursday that homes sold last month at a seasonally adjusted annualized rate of 5.49 million units, the best performance since March 2018. Sales have increased 2.6 percent from a year ago.
The recent bump in home sales are a sign of US consumers’ resilience despite a darkening outlook for growth. Cheaper borrowing costs have improved affordability for buyers, making them more eager to buy despite rising prices amid a shortage of properties for sale.
‘‘Consumers seem to still be confident in their finances, and are clearly feeling good enough to make large purchases such as buying a home,’’ said John Pataky, executive vice president at TIAA Bank. ‘‘The prolonged period of low mortgage rates has helped pull buyers off the sidelines by making home purchases a more affordable proposition.’’
The median sales price climbed 4.7 percent from a year ago to $278,200, outpacing average wage gains.
Home buyers have been a beneficiary from the recent economic uncertainty, as interest rates have fallen in response to slower global growth and President Trump’s tariffs against China.
The 30-year mortgage rate averaged 3.73 percent this week, according to mortgage buyer Freddie Mac.
Still, the upside is limited by a decline in sales listings. There were 1.86 million properties for sale at the end of August, down 2.6 percent from a year ago.
The inventory crunch appears to be most pronounced in starter homes priced below $250,000, the kinds of properties that are generally affordable for first-time buyers. Sales of homes worth less than $250,000 have fallen in the past year, while sales of home priced between $250,000 and $1 million have risen.
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