Sales of existing homes rise to 6-year high

In July, Americans bought more homes than in any month since August 2006, a sign of robust sales and a reflection of improving consumer confidence.

The National Association of Realtors said Thursday that sales of existing homes climbed 0.9 percent to a seasonally adjusted annual rate of 5.43 million. That represents a 6.8 percent gain from July 2016. Sales are in line with the previous peak set in November 2005. The median price of a home rose 1.5 percent from a year ago to $232,400.

Higher prices are a sign of the robust economy. But in a sign of choppy housing activity, housing starts slowed sharply in August and existing home sales for August were unchanged from July. That’s not unusual, said Patrick Newport, an economist at IHS Markit.

“The housing market as a whole is not getting crowded,” Newport said. “It’s a very open market.”

Housing accounts for about 13 percent of the U.S. economy, and sales are essentially flat when compared with last year. That’s because prices rose almost twice as fast as incomes since last year.

The housing market has seen brisk demand for both new and existing homes as incomes climb while mortgage rates and loan availability have improved. The recent increase in the price of homes has mostly gone to builders, who have benefited from more robust construction by their subcontractors and access to capital at better rates. Home builders raised construction costs this year and expect to raise prices next year in anticipation of sustained demand for homes.

Builders have received more orders in the past three months than in any year since mid-2006, according to the builders’ trade group. Orders were up 7.5 percent in July from June, which was an even stronger gain than the growth of earlier this year.

Sales have been strongest in the Northeast and the West, where some regions have made up for declines earlier this year. In all regions except the South, sales rose in July.

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