partlycloudy
Thursday August 27th, 2015 3:30PM

Home sales hit 6 1/2-year high

By The Associated Press
WASHINGTON (AP) -- U.S. home sales rose last month to the highest level since February 2007 as buyers rushed to close deals before mortgage rates increased further.

Yet the gain could represent a temporary peak if higher rates slow sales in coming months.

Sales of previously occupied homes rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August, the National Association of Realtors said Thursday. That level is consistent with a healthy market.

August sales reflect contracts signed in June and July, when mortgage rates were rising steadily. The Realtors' group cautioned that buyer traffic dropped off significantly in August. That points to fewer sales in the fall.

Higher rates could also depress home buying next year, the Realtors' said. The group forecasts that sales will average 5.2 million in 2014. That's still better than the 4.19 million sales in 2010, when the housing market bottomed.

"We should expect some giveback in sales over the next several months," said Thomas Feltmate, an economist at TD Economics.

Steady job gains and low mortgage rates have fueled a recovery in housing since early last year. But rates have risen since May and have begun to restrain housing's rebound.

The average rate on a 30-year fixed mortgage was 4.57 percent last week, near a two-year high and more than a full percentage point higher than in May. That's when Federal Reserve Chairman Ben Bernanke suggested that the Fed could soon scale back its $85-billion-a-month bond purchase program, which is intended to keep interest rates low.

On Wednesday, in a surprise, the Fed decided against reducing its bond purchases. It said one key reason for its decision was the sharp increase in mortgage and other interest rates. Pulling back on its bond purchases could have sent such rates even higher.

Many economists say the housing recovery should withstand the recent rate increase. Mortgage rates are still quite low by historical standards.

"While higher mortgage rates are likely to temper existing home sales over the coming months, it by no means will derail the housing recovery," Feltmate said.

Other figures in the report were mixed. "Distressed" sales, which include foreclosures and homes with mortgages that exceed the home values, made up just 12 percent of sales. That was down from 23 percent a year earlier.

That means that traditional sales have risen 31 percent in the past year, said Paul Diggle, an economist at Capital Economics.

At the same time, potential homebuyers, particularly first-time purchasers, still appear to have difficulty qualifying for loans.

All-cash sales accounted for 32 percent of purchases, up from 27 percent a year ago. First-time buyers made up only 28 percent of sales, down from 31 percent a year earlier.

First-time buyers usually propel housing recoveries. But in recent years, they've struggled to meet higher credit standards. Many lenders also now require higher down payments.

The supply of available homes remains tight, the Realtors' group said. There were 2.25 million homes for sale last month, down 6 percent from a year earlier.

Rising prices could encourage developers to build more homes. Last month, builders broke ground on the most single-family homes since February and sought the most permits to build those homes in more than five years.

Homebuilder confidence remained at its highest level in nearly eight years in September, according to a survey by the National Association of Home Builders. But builders are starting to worry that sales may slow in coming months if rates keep rising, the survey found.
© Copyright 2015 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Dogs seized from Stephens Co. puppy mill ready for adoption this weekend
More than three dozen dogs seized from a puppy mill in Stephens County last week will be up for adoption in the Atlanta area this weekend.
2:00PM ( 1 hour ago )
Coastal Ga. residents urged to watch for Tropical Storm Erika
Emergency officials on the Georgia coast are urging residents to start preparing for possible trouble from Tropical Storm Erika.
By The Associated Press
1:12PM ( 2 hours ago )
Nearly 200 patients qualify for Ga. medical marijuana registry
Public health officials reported nearly 200 patients have now qualified for Georgia's new medical marijuana registry, with an uptick in the number of doctors now approved to recommend cannabis oil as a treatment.
By Associated Press
10:54AM ( 4 hours ago )
Gainesville City Council mulls fireworks ordinance; hearings set for ad valorem tax
City leaders in Gainesville are considering an ordinance that would regulate where "consumer fireworks" can be sold in the city.
10:30AM ( 5 hours ago )
Applications for US jobless aid drop to very low 271,000
WASHINGTON (AP) — Fewer people sought U.S. unemployment benefits last week, evidence that employers remain confident in the economy and are laying off few workers.
9:24AM ( 6 hours ago )