Existing-home sales, market strong ahead of potential Fed tapering
Posted on Wednesday, August 21, 2013 at 11:04:06 AM
The numbers for July are in, and existing-home sales greatly increased as the housing market was strong overall.
Residential financing is an ideal way to purchase a home, and many people across the U.S. are doing just that. Existing-home sales - transactions that included single-family, townhomes, condos and co-ops - increased significantly in July, according to the National Association of Realtors.
In total, sales grew 6.5 percent to a seasonally adjusted annual rate of 5.39 million units on the month. That is ahead of last year's pace, and is the 25th month in a row where sales have beaten year-over-year levels.
Affordable residential financing is a strong incentive, and current rates have helped. Any future changes might become an issue, though.
"Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines," said NAR chief economist Lawrence Yun. "The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers."
That sets up a good projection for the remainder of 2013, although some economists are concerned about potential changes the Federal Reserve might announce in the coming weeks.
Fannie Mae reported that Fed tapering might constrict growth, although the year so far has been positive, while the yearly prediction appears to be on track.