Sales of existing homes soared 6.5 percent in July, signaling a solid rebound in the housing market, according to the National Association of Realtors. Existing sales reached a seasonally adjusted annual rate of 5.39 million, which is above analysts' expectations and 17.2 percent above the pace of sales in July 2012.
The median price of an existing home also saw a double-digit increase from a year ago: July's median price of $213,500 is 13.7 percent higher than it was in July 2012.
NAR Chief Economist Lawrence Yun credited increasing rates with July's spike in sales. "The initial rise in (mortgage) interest rates provided strong incentive for closing deals," he said in a release. "However, further rate increases will diminish the pool of eligible buyers."
Guess what else is going up?
Mortgage rates are on a slow rise. The 30-year fixed-rate mortgage jumped to 4.74 percent this week from 4.57 percent last week, according to the Bankrate.com national survey of large lenders. Today's rate is still considered historically low when compared to the years leading up to the housing collapse.
In another positive sign for housing, distressed homes -- short sales and foreclosed properties -- accounted for 15 percent of July sales, the same percentage as in June. In July 2012, such homes made up 24 percent of total sales. Nine percent of July's existing home sales were foreclosures, while 6 percent were short sales.
Distressed properties, which are sold at deep discounts, typically depress home prices and put a strain on recovery.
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