Existing-home sales rose in August following a big correction in July, according to the National Association of Realtors (NAR), which reported a 7.6% increase to a seasonally adjusted annual rate of 4.13 million last month from an upwardly revised 3.84 million in July.
While the numbers showed improvement in August, existing-home sales still remain subpar, Lawrence Yun, NAR chief economist, said in a statement. Existing-home sales are completed transactions that include single-family, townhomes, condominiums, and co-ops.
“The housing market is trying to recover on its own power without the federal home buyer tax credit stimulus,” Yun said. “Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty.”
Last month’s numbers remain 19.0% below the 5.10 million-unit pace in August 2009. According to Freddie Mac, the national average commitment rate for a 30-year, fixed-rate mortgage fell to a record low 4.43% in August from 4.56% in July. The rate was 5.19% in August 2009. The national median existing-home price for all housing types was $178,600 in August, up 0.8% from a year ago. Distressed homes rose to 34% of sales in August from 32% in July; they were 31% in August 2009.
Economists’ consensus was for a 4.05 million increase in existing-home sales.
“Existing home sales equals closings, meaning the August number reflects some mix of contract sales that occurred in June, July, and August. We know that sales in those months were somewhat depressed by the pull of sales into April, because of the tax credit. The August uptick reflects the waning influence of the April effect,” said Steve Blitz, senior economist with New York-based Majestic Research.
Blitz said he now assumes that sales will trend back toward the 4.5 million mark over the next several months, which is consistent with a 2% growth economy and a 9.5% unemployment rate.