The U.S. housing market continues to show positive signs as existing home sales and builder confidence numbers were on the rise in August, according to the National Association of Realtors and the National Association of Homebuilders.
Existing home sales rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million in August from 4.47 million in July. Comparing year to year, August sales this year were 9.3 percent higher than August 2011.
Lawrence Yun, NAR chief economist, said favorable buying conditions get the credit. "The housing market is steadily recovering with consistent increases in both home sales and median prices. More buyers are taking advantage of excellent housing affordability conditions," he said. "Inventories in many parts of the country are broadly balanced, favoring neither sellers nor buyers. However, the West and Florida markets are experiencing inventory shortages, which are placing pressure on prices."
The national median existing-home price for all types of housing rose 9.5 percent to $187,400 from August 2011 to August 2012. The August increase was the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.
Meanwhile, the NAHB reports that builder confidence in the market for new homes rose for the fifth month in a row. In September the level rose to 40, marking the index’s highest rating since June 2006.
“This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery and several obstacles are slowing our progress,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work – which would create needed jobs — and discouraging consumers from pursuing a new-home purchase.”
The survey, the NAHB/Wells Fargo Housing Market Index, conducted for the past 25 years, gauges builder perception of home sales and sales expectations for the upcoming six months. Any number over 50 indicates that more builders view sales conditions as good than poor.
And more good news for buyers: the average 30-year fixed rate mortgage dropped to 3.49 percent with a .6 point this week, according to Freddie Mac. The average 15-year fixed rate mortgage came in at 2.77 percent with a .6 point.
Michele Dawson is a freelance writer based in Phoenix, Arizona. She spent seven years as a newspaper reporter and has written for various magazines and web sites specializing in real estate and home improvement, including Realty Times, SmartHomeowner, California Builder, and the Sacramento Business Journal.