WASHINGTON (AP) – A jump in sales of previously occupied homes and further gains in home construction suggest the U.S. housing recovery is gaining momentum.
Sales of previously occupied homes rose 7.8 percent in August from July to a seasonally adjusted annual rate of 4.82 million, the National Association of Realtors said Wednesday. That’s the highest level since May 2010, when sales were aided by a federal home-buying tax credit.
At the same time, builders broke ground on 2.3 percent more homes and apartments in August than July. The Commerce Department said the annual rate of construction rose to a seasonally adjusted 750,000. The increase was driven by the best rate of single-family home construction since April 2010.
The pair of reports comes amid other signs of steady progress in the housing market after years of stagnation. New-home sales are up, builder confidence is at its highest level in more than six years and increases in home prices appear to be sustainable.
“The U.S. housing recovery is for real,” said Sal Guatieri, an economist at BMO Capital Markets, in a note to clients. “Great affordability, pent-up demand and strong investor interest in rental units are driving the market.”
Still, home sales and housing starts are rising from depressed levels. Sales of previously occupied homes remain below the more than 5.5 million that economists consider consistent with a healthy market.
The number of first-time homebuyers, who are critical to a housing rebound, slipped to 31 percent from 34 percent. In a typical market, that figure is usually closer to 40 percent.
More Americans appear to be taking advantage of near-record low mortgage rates and prices that are, on average, much lower than they were six years ago.
Sales might be higher if more homes were available, the Realtors’ group said. The limited supply is helping to lift prices. There were 2.47 million homes available for sale in August. It would take just more than six months to exhaust that supply at the current sales pace. That’s the typical pace in a healthy market.
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