money Home sales reach highest levels since the 2006 housing bubble
Sales of previously owned homes hit the highest level in almost 14 years, as housing continued its bounce back after the coronavirus shutdowns in the spring.
Total sales in August hit a seasonally-adjusted annual rate of 6 million units, the highest level since December 2006 before the housing crash helped to usher in the Great Recession. August sales were also 2.4% higher versus July and 10.5% higher than a year ago.
Read more: Buying a house: What you need to know about home ownership
Still, housing scarcity remains, with average listings sitting on the market for just 22 days, tying the existing record. That helped to push prices higher for the 102nd month in a row to $310,600, up 11.4% from last year.
“The August increase in existing-home sales was further confirmation of the housing market’s V-shaped recovery and overall strength in demand,” said Joel Kan, associate vice president of economic and industry forecasting at the Mortgage Bankers Association, a trade organization.
‘People are trading up to larger spaces’
Rising prices didn’t deter buyers as they’ve rushed in droves to reap the benefits of mortgage rates near historic lows. The rate on the 30-year fixed mortgage has hovered below 3%.
Read more: The new rules of buying and selling a house in a pandemic
“Major metropolitan cities like New York were hit the hardest by the pandemic due to the inherent congestion of living in an urban environment,” said Tania Isacoff Friedland, a real estate agent at Warburg Realty. “But my clients in New York are eager to get off the sidelines and ‘trade up’ to larger spaces where they can take advantage of historically low interest rates.”
The Northeast saw the largest month-over-month spike in housing sales at 13.8%, but the smallest annual increase of 5.7%. Sales in the Midwest edged up 1.4% from July, but was up 9.3% from a year earlier.
Home sales in the South and West rose 0.8% each from July, while year-over-year sales in the South jumped 13% and West sales increased by 9,6%.
“Even if home sales come down from this high level, the demographics are favorable for sales to continue to happen,” said Danielle Hale, chief economist at Realtor.com. “By that, I mean millennials are a big group and they are aging into years where they will do a lot of home-buying — both first-time and trade-up buying.”
Dhara is a reporter Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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