More Previously-owned homes are being bought by Americans in July, suggesting that the housing market is improving.
The National Association of Realtors said home sales rose 2.3 percent last month, while sale rise to a adjusted annual rate of to 4.47 million units, up from 4.37 million units in June. It was just under the predicted 4.52 million-unit rate.
Low interest rates and a modest improvement in the labor market helped home buying conditions, the NAR said.
“Mortgage interest rates have been at record lows this year,” said the NAR’s chief economist Lawrence Yun, adding that the labor market was also showing signs of improvement.
“Combined, these factors are helping to unleash pent up demand,” he said. “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
The NAR is asking the government to release the foreclosed properties it owns in inventory-constrained markets. The median price for a home resale was $187,300 in July which is 9.4 percent higher from last year.
Sales declined 5.4 percent in June to 4.37 million adjusted annual rate. Wednesday’s housing number could be a sign of strength for the housing market, which is beginning to recover from the after-effects of the financial crisis.
Data suggest that the housing market is on the rise with prices and sale are becoming stable.
Home building is now a smaller role than it played back in 2007-2009 recession, and a turn for the worse in the broader economy could easily undo housing’s incipient recovery.
“We think the housing sector has turned a corner and demand will continue to improve,” said Michelle Girard, a senior economist at Royal Bank of Scotland in Stamford, Ct.
“The data also underscores the fact that improvement will be gradual. What would help the housing sector would be a stronger economy, better job growth, and easier financing conditions. I still think it’s difficult to get a mortgage loan, that’s hindering activity.”
A separate report Wednesday showed applications for U.S. home mortgages tumbled last week, with demand for refinancing drying up as mortgage rates jumped to their highest level since late June.