The housing market got a double jolt of good news today, with both existing home sales and new home construction showing healthy gains in August, according to new reports.
Existing home sales were up 7.8 percent for the month, to a seasonally adjusted annual rate of 4.82 million, according to figures from the National Association of Realtors. That also reflects a 9.3 percent annual increase over the August 2011 figure of 4.41 million units.
It’s the highest level reported since May 2010, when sales spiked sharply ahead of the deadline for the home buyer tax credit, which boosted the market temporarily.
Meanwhile, the Census Bureau reported today that construction starts on single family homes were at a seasonally adjusted annual rate of 535,000 in August, up 5.5 percent over July’s figures and an impressive 26.8 percent annual gain over the August 2011 rate of 422,000 units.
Pent-up demand cited
Both figures are still relatively weak by pre-recession standards but are encouraging news for an industry that has been mired in the doldrums since the recession hit and is generally considered a major driver of the economy.
“The housing market is steadily recovering with consistent increases in both home sales and median prices,” said Edward Yun, NAR chief economist. “More buyers are taking advantage of excellent housing affordability conditions.”
He said the housing market is getting stronger despite the difficulty that many borrowers continue to have in qualifying for mortgages, which he said is an indication of how pent-up demand has developed over the past five years.
Prices up
The median sales price for existing homes of all types was $187,400, reflecting a 9.3 percent annual gain over the August 2011 level, according to the NAR, and the sixth consecutive month that home prices have shown an annual increase.
The one part of today’s housing data that looked a bit soft was in newly issued building permits for single family homes, which rose only 0.2 percent over their July level, to a seasonally adjusted annual rate of 512,000. However, that still represented a 19.3 percent annual increase over the past 12 months, according to Census Bureau figures.
By Peter King
First published on MortgageLoan.com at: http://www.mortgageloan.com/home-sales-construction-rise-9245
