US home sales hit 6 year high but could slow soon
WASHINGTON – U.S. home sales rose last month to the highest level since February 2007 as buyers rushed to close deals before mortgage rates increased further.
Yet the gain could represent a temporary peak if higher rates slow sales in coming months.
Sales of previously occupied homes rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August, the National Association of Realtors said Thursday. That level is consistent with a healthy market.
August sales reflect contracts signed in June and July, when mortgage rates were rising steadily. The Realtors’ group cautioned that buyer traffic dropped off significantly in August. That points to fewer sales in the fall.
Higher rates could also depress home buying next year, the Realtors’ said. The group forecasts that sales will average 5.2 million in 2014. That’s still better than the 4.19 million sales in 2010, when the housing market bottomed.
“We should expect some giveback in sales over the next several months,” said Thomas Feltmate, an economist at TD Economics.
Steady job gains and low mortgage rates have fueled a recovery in housing since early last year. But rates have risen since May and have begun to restrain housing’s rebound.