WASHINGTON (AP) — U.S. sales of previously occupied homes
jumped in August to the highest level in more than two years, adding
momentum to the housing recovery.
Sales rose 7.8 percent to a
seasonally adjusted annual rate of 4.82 million, the National
Association of Realtors said. That’s the most since May 2010, when sales
were fueled by a federal home-buying tax credit.
The figures were
reported the same day the government said U.S. homebuilders broke
ground on more new homes in August compared to July.
Still, the
recovery is from a depressed level. Sales of previously occupied homes
remain below the more than 5.5 million that economists consider
consistent with a healthy market.
And the number of first-time homebuyers, who are critical to a housing rebound,
slipped to 31 percent from 34 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 over six months to exhaust that supply at the current sales
pace. That’s the typical pace in a healthy market.
The broader
economy may also benefit from recent and more sustainable gains in home
prices. When that happens, Americans typically feel wealthier and spend
more. Consumer spending drives 70 percent of the economic growth.
Wednesday’s
positive reports follow other signs that there is a sustained recovery
in housing under way. Home prices are rising steadily nationwide. Sales
of new homes are also picking up. And home builders are more confident
and are breaking ground on more new homes.
The National
Association of Home Builders/Wells Fargo builder sentiment index,
released Tuesday, rose to the highest level in more than six years in
September. Customer traffic and sales are at their highest levels since
2006, the peak of the housing bubble.
Even with the gains in home
sales, the market remains weak. Many would-be buyers are having
difficulty qualifying for loans or can’t afford the larger down payments
being required by banks.
The Federal Reserve last week moved to
push mortgage rates even lower. Fed Chairman Ben Bernanke said the bank
would purchase $40 billion of mortgage-backed securities each month
until the job market improves "substantially." That could push down
longer-term interest rates and spur more borrowing and spending.
The
Fed also hopes that lower mortgage rates will accelerate the housing
market recovery and boost home prices. That, in turn, could make people
feel wealthier and more willing to spend, which would bolster economic
growth.
Copyright 2012 The Associated Press.