Buyers who might have been on the fence about a home purchase jumped into the market over the summer, spurred on by rising mortgage rates. Last month, home sales reached their highest level since February 2007, according to the National Association of Realtors.
Existing-home sales rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million -- a level that is considered healthy. Sales activity actually slowed in August: The latest report represents signed contracts in June and July. Since August 2012, sales have risen by 13.2 percent.
Earlier this week, additional data came out to support the late-summer slowdown. After four months of gains, September's National Association of Home Builders Housing Market Index remained steady. The index measures builder confidence in the market for new, single-family homes.
The latest Bankrate.com national survey of large lenders revealed rates for a 30-year fixed-rate mortgage at 4.66 percent, up from 3.7 percent a year ago.
Buying could be slowed by interest rate increases, but that's not all, according to Lawrence Yun, chief economist at the National Association of Realtors.
"Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions," he said in a statement. "Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn't as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase."
The supply of existing homes for sale is 6.3 percent below what it was a year ago. In August, there were 2.25 million existing homes for sale, which represents a 4.9-month supply at the current sales pace.
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