US Home Sales Soar in July to Fastest Pace Since Early 2007 - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

US Home Sales Soar in July to Fastest Pace Since Early 2007

Posted:
(Photo credit: thinkstock) (Photo credit: thinkstock)

 WASHINGTON (AP)- Americans stepped up their home-buying for a third straight month in July, as sales accelerated to the strongest pace in eight years.
    
The National Association of Realtors said Thursday that sales of existing homes rose 2 percent last month to a seasonally adjusted annual rate of 5.59 million, the fastest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has declined 4.7 percent.
    
Steady job growth and relatively low mortgage rates have convinced current homeowners to purchase homes, while first-time buyers remain scarce. The housing market contains a mere 4.8 months' supply of homes, meaning that prices are rising for an increasingly narrow set of properties.
    
The slow six-year recovery from the Great Recession has finally revitalized the housing market. Home sales have soared in recent months, as more current homeowners have returned to the real estate market for an upgrade or to downsize as they approach retirement. Yet the upswing also reflects increasing problems with affordability that have left first-time buyer on the sidelines.
    
"When first-time homebuyers compete with people who are more qualified borrowers that have additional cash, they tend to lose," said Butch Huskey, chief executive of the real estate brokerage Coldwell Banker.
    
The median home price climbed 5.6 percent over the past 12 months to $234,000. Just 28 percent of the purchases last month went to first-time homebuyers, a group that historically accounted for 40 percent of sales. A more balanced market would contain six months' of supply_instead of less than five_and provide potential homebuyers with a greater selection of homes.
    
Current homeowners with equity have been able to absorb some of that price appreciation as they've shopped for another home. But the recent sales explosion also reflects two critical factors: the economy adding a solid 2.9 million jobs over the past 12 months and the average, 30-year fixed mortgage rate staying around 4 percent. At roughly two percentage points below the historical level, mortgage rates have reduced monthly borrowing costs for buyers.
    
Still, the trajectory of mortgage rates- and sales- going forward is unclear.
    
It's possible that a weakening global economy will cause more investors to buy U.S. Treasury bonds, a move that has historically held down mortgage rates. The average mortgage rate has slipped slightly as China has endured stock market volatility and reduced the value of its currency.
    
Yet the Federal Reserve is preparing to raise a key interest rate for the first time in nearly a decade. Economists say the Fed could lift its fed funds rate from near-zero as soon as September, an increase that would potentially cause mortgage rates to rise. When Fed officials previously announced plans in 2013 to pull back on other forms of economic stimulus, mortgage rates suddenly spiked and derailed home sales for several months.
    
The July sales increase occurred in the South and West. Home purchases remained unchanged in the Midwest and slipped in the Northeast.
    
Despite the higher sales, more Americans are choosing to rent. So far this year, the share of the U.S. population who owns homes has fallen to 63.4 percent, a 48-year low, according to the Census Bureau. The shift toward renting has reduced vacancies and caused rental prices to increase at 4.3 percent, more than double the meager 2.1 annual increase in average hourly wages.
    
Fewer millennials younger than 34 are forming households and the purchase of first homes is increasingly deferred. The median first-time buyer is renting longer and spending more money to purchase their homes, according to the real estate firm Zillow.
    
Meanwhile, the percentage of young adults living with their parents increased in 2015, according to a new analysis by the Terner Center for Housing Innovation at the University of California, Berkeley.
    
"Later marriage, rising rents, and a not-strong-enough jobs recovery probably all contribute," said Jed Kolko, a senior fellow at the center.

  • Delmarvawide NewsDelmarvawide NewsMore>>

  • Eastern Shore Pipeline Faces Opposition and Support

    Eastern Shore Pipeline Faces Opposition and Support

    Jun 19, 2018 10:32 PM2018-06-20 02:32:00 GMT
    Tuesday, June 19 2018 10:32 PM EDT2018-06-20 02:32:16 GMT
    The Delmarva Pipeline Company went before Maryland lawmakers earlier this year to present their plans for a 190-mile natural gas pipeline to run from Cecil County down to Accomac, Virginia.More
    The Delmarva Pipeline Company went before Maryland lawmakers earlier this year to present their plans for a 190-mile natural gas pipeline to run from Cecil County down to Accomac, Virginia. More
  • Delaware Unemployment Rate Falls to 4 Percent in May

    Delaware Unemployment Rate Falls to 4 Percent in May

    Jun 19, 2018 7:18 PM2018-06-19 23:18:00 GMT
    Tuesday, June 19 2018 7:18 PM EDT2018-06-19 23:18:08 GMT
    DOVER, Del. --- Delaware’s unemployment rate fell in May to 4 percent, as the number of unemployed state residents fell below 20,000 for the first time in adecade. The last time was May 2008, when there were 19,449 unemployed. The Delaware DepartmenMore
    DOVER, Del. --- Delaware’s unemployment rate fell in May to 4 percent, as the number of unemployed state residents fell below 20,000 for the first time in adecade. The last time was May 2008, when there were 19,449 unemployed. The Delaware DepartmenMore
  • DNR Grants Money to Towns on Delmarva to Help with Flooding Issues

    DNR Grants Money to Towns on Delmarva to Help with Flooding Issues

    Jun 19, 2018 7:06 PM2018-06-19 23:06:00 GMT
    Tuesday, June 19 2018 7:06 PM EDT2018-06-19 23:06:04 GMT
    DEAL ISLAND, Md.- The Maryland Department of Natural Resources today is giving $700,000 in Climate Resilience Grants to help communities across the state recover from flooding problems and climate-related impacts. DNR explained the grants are designed to More
    DEAL ISLAND, Md.- The Maryland Department of Natural Resources today is giving $700,000 in Climate Resilience Grants to help communities across the state recover from flooding problems and climate-related impacts. DNR explained the grants are designed to More
  • Most Popular StoriesMost Popular StoriesMore>>

  • New Details on Firefly Death, Medical Response

    New Details on Firefly Death, Medical Response

    Jun 18, 2018 10:36 PM2018-06-19 02:36:00 GMT
    Tuesday, June 19 2018 7:44 AM EDT2018-06-19 11:44:52 GMT
    DOVER, Del.- The 20-year-old Philadelphia woman who was found unconscious at her Firefly campsite was in cardiac arrest before she passed away, according to local officials. Kent County's Director of Public Safety says Firefly attendee Caroline Friedman wMore
    The 20-year-old Philadelphia woman who was found unconscious at her Firefly campsite was in cardiac arrest before she passed away, according to local officials. Kent County's Director of Public Safety says Firefly attendee Caroline Friedman wMore
  • Multiple Arrests Made During Firefly Weekend

    Multiple Arrests Made During Firefly Weekend

    Jun 18, 2018 4:57 PM2018-06-18 20:57:00 GMT
    Tuesday, June 19 2018 7:36 AM EDT2018-06-19 11:36:34 GMT
    (Left to right) William Rodriguez, Hassan Mceachin and Shakir Styles(Left to right) William Rodriguez, Hassan Mceachin and Shakir Styles
    (Left to right) William Rodriguez, Hassan Mceachin and Shakir Styles(Left to right) William Rodriguez, Hassan Mceachin and Shakir Styles
    Dover police made multiple arrests at the Firefly Music Festival this weekend.More
    Dover police made multiple arrests at the Firefly Music Festival this weekend.More
  • Two Arrested Following Seaford Prostitution Sting

    Two Arrested Following Seaford Prostitution Sting

    Jun 19, 2018 5:20 PM2018-06-19 21:20:00 GMT
    Tuesday, June 19 2018 5:22 PM EDT2018-06-19 21:22:01 GMT
    Two people were arrested following a prostitution sting in Seaford Tuesday.More
    Two people were arrested following a prostitution sting in Seaford Tuesday.More
Powered by Frankly

All content © Copyright 2000 - 2018 WBOC. All Rights Reserved. For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices