Re-sales of homes in the United States beat analyst predictions last month. Information released Wednesday by the National Association of Realtors revealed sales of previously-owned homes edged up 2.5% in July, as mortgage rates offset the affordability crunch caused by high home prices at the margins.
Existing home sales occurred at a 5.42 million seasonally-adjusted annual pace, up from a revised 5.29 million in June. Compared with a year ago, sales were 0.6% higher. Economists had expected an average annual rate of 5.40 million.
Average interest rates on 30-year mortgages have fallen to 3.60%, the lowest in nearly three years. Cheaper borrowing costs have enabled sales to rise 0.6% from a year ago, ending 16 consecutive months of annual sales declines.
The low rates are providing a boost to a housing sector where affordability remains an obstacle for many would-be buyers. Home prices have risen fastest for the bottom half of the market since 2012, making it harder to save for a down payment or manage monthly payments at a higher mortgage rate.
Moreover, NAR said, the median sales price increased 4.3% from the prior-year to $280,800. While the rate of home price appreciations has slowed considerably this year, prices continue to rise thanks largely to the constrained inventory of homes for sale.
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