Washington, DC, United States (4E) – Existing-home sales for August surprised economists as they rose to the highest level in more than six years as buyers rushed to buy in order to lock in interest rates before they rise any further.
August sales of previously owned U.S. homes climbed 1.7 percent to a seasonally adjusted annual pace of 5.48 million from the previous month, according to the National Association of Realtors (NAR) report released Thursday.
The monthly sales figure was the highest since February 2007, at a time when home values started to fall from the housing bubble. The rate increased by 13.2 percent compared with the year-ago figure.
Economists forecast sales to ease at a rate of 5.25 million in August. The figure for July was unrevised at a 5.39 million rate.
The data is a reflection of transactions that started in June or July, when mortgage rates available for buyers trying to get loans were at near record lows. The NAR’s chief economist said sales will likely decline, combined with data indicating weaker demand for new homes and slower construction activity, which explains why Fed officials decided Wednesday to keep the current pace of monetary stimulus steady.
The rise of mortgage rates during the summer has prompted more potential homebuyers to purchase as they want to lock in rates before they increase further. This week, a 30-year fixed rate mortgage loan carries an average rate of 4.5 percent, according to a Freddie Mac statement Thursday. While that rate is near historical lows, it is well above the 3.5 percent level in the spring.