US existing home sales rise in August

Sales of previously owned homes in the United States rose modestly in August after a July surge, an industry group said Thursday. Existing-home sales increased at an annual rate of 5.48 million in August from 5.39 million in July, the National Association of Realtors (NAR) said. The gain surprised analysts who had expected sales would fall, to 5.30 million, amid rising mortgage interest rates. Sales were at the highest pace since February 2007, when they hit 5.79 million, NAR said. The August sales were up 13.2 percent from a year ago, the 26th month of year-over-year gains as the housing market crawls out of the 2006 price bubble collapse. But Lawrence Yun, NAR chief economist, warned the market's strength may be fleeting. "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," Yun said. "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." Housing inventory shrank to a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. The tight supply was encouraging bidding wars in some areas: 17 percent of all homes sold above the asking price in August, NAR said. But 63 percent of the homes sold below list price. The national median existing-home price was $212,100 in August, up 14.7 percent from a year ago, the strongest gain since October 2005. The average 30-year fixed mortgage rate rose to 4.46 percent in August from 4.37 percent in July. The rate stood at 3.60 percent in August 2012.