Existing home sales up for fourth consecutive month

08.21.09
By Timothy Jones

Could the U.S. real estate market be turning around? New figures from the National Association of Realtors suggest growing affordability is boosting home sales among both first-time buyers and repeat buyers.

Sales of existing single-family homes rose by 7.2 percent in July to a seasonally adjusted level of 5.24 million, the NAR says.

This is the fourth month in a row that sales have increased - and July's level also represents a 5 percent increase on the same month the year before.

Another positive sign seen in the monthly sales data: July's sales gain was the greatest recorded since the NAR began keeping track of existing home sales in 1999.

Low home loan rates are a likely factor for the boost, as data from Freddie Mac shows that the average interest rate for a 30-year fixed-rate mortgage was 5.22 percent last month, down from 5.42 percent in June.

But not everyone is taking out a home loan before buying. NAR chief economist Lawrence Yun said that there has been an increase in cash-only offers for homes in areas in which price-to-income ratios had fallen significantly.

According to the NAR report, sales were higher among both first-time buyers - who receive a tax credit for their purchase - and repeat buyers.

"The housing market has decisively turned for the better," Yun commented. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."

According to separate NAR data, the median price of a U.S. home was 15.6 percent lower in the second quarter of 2009 than during the same period in 2008.

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Home loans are less expensive and homes are more affordable.