Sales of Existing Homes Unexpectedly Surge in August

blr-editor | September 21, 2011 | Comments (0)

Home prices showed an unexpectedly sharp increase in August

Sales of existing home sales unexpectedly spiked upwards in August, defying a poor economy, tight credit, and disruptions from Hurricane Irene, according to the National Association of Realtors (NAR). August’s gains were visible in all regions of the U.S.

Existing-home sales – completed transactions that include single-family, townhomes, condos and co-ops – rose 7.7% to a seasonally adjusted annual rate of 5.03 million in August from an upwardly revised 4.67 million in July, and are 18.6 percent higher than the 4.24 million unit level in August 2010.

Lawrence Yun, NAR chief economist, said there are some positive market fundamentals. “Some of the improvement in August may result from sales that were delayed in preceding months, but favorable affordability conditions and rising rents are underlying motivations,” he said, adding, “Investors were more active in absorbing foreclosed properties. In additional to bargain hunting, some investors are in the market to hedge against higher inflation.”

Additionally, mortgage rates are at historic lows across the board, from 15-year and 30-year mortgages to jumbo mortgages.