Existing home sales are up 6.5% in July, reaching the highest level of increase since 2009, as reported by the National Association of Realtors. Sales have reached a seasonally adjusted annual rate of 5.39 million! This is a 17.2% improvement from last July.
Also, housing inventory also expanded 5.6% in July, which equates to 2.28 million properties on the market. Over 5 million homes were sold each month during this last quarter… the last time this happened was in 2007! This is a far step up from the slow real estate sales trends that we saw after the housing bubble burst.
So what does this mean for the future of the market? Analysts say that a healthy sales pace is between 5 and 5.5 million nationwide. Looking at the past 3 months, this pace seems easily attainable; however, rising mortgage rates could become a barrier to a sustainable real estate market.
“’Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines” reports Lawrence Yun, NAR Chief Economist.
30-year mortgages have risen by a full percentage point since May. To illustrate the impact of these rates, a buyer purchasing a $215,000 home in July who put 20% down is paying $100 more per month than that very same buyer who purchased in May 2013 1. Talk about a price hike!
The housing market remains in the recovery phase and will continue to grow despite rising mortgage rates, but these inflating percentages are definitely something to watch out for. For the time being, July’s numbers simply prove that NOW is the time to buy and sell real estate.
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1 Information source: USA Today