Sales of existing homes in the U.S. in August hit peak levels not seen since March 2006 as home buyers swarmed back to the market to secure record low loan fees as mortgage rates are on a rise. This report is an indication of ongoing strength in the housing market recovery.
On Sept 19, the National Association of Realtors reports that existing home sales moved up by 1.7 percent to a 12 month rate of 5.48 million units in August, the best levels dating back to the collapse of home values. Many realtors claim the increase is a one-off due to hesitant buyers who were spurred on by rising mortgage rates and costs. They expect resale homes in the fall to fall much more but that could change as well due the Federal Reserve not tapering as soon.
The median home sales price on an annual basis rose to $212,100 in August an increase 14.7 percent. Based on figures from the California Association of Realtors, California’s median home price rose to $441,300 in August, the best mark dating back to December 2007. That statistic indicates an annual gain of 28.4 percent.
In the Bay Area’s nine counties, the median home price increased to $704,830 in August, a gain of 24.1 percent on a year-over-year basis. However, realtors say this is because of tight inventory and sales of luxury homes over $1 million dollars being up 30% year over year in high costs areas like California. Once these numbers trend to be more in line and rising rates, this could spell trouble ahead. In addition, more than half of people surveyed by Fannie Mae think now is not a good time to buy or sell. On the other side, there are those who will buy when many have negative outlooks and rates are still historically low.