By CHRISTOPHER S. RUGABER
2014-08-21 10:42 PM
WASHINGTON (AP) -- Sales of existing U.S. homes rose for the fourth straight month in July to their highest level in nearly a year, the latest sign that the housing recovery is picking up after stumbling at the start of the year.
The National Association of Realtors says home sales rose 2.4 percent to a seasonally adjusted annual rate of 5.15 million, the highest since last September.
More homeowners are selling their homes, mortgage rates remain low and home price gains have slowed this year. That's made home purchases more affordable.
Sales peaked in July 2013 and then fell as interest rates rose from low levels. Harsh winter weather also slowed sales earlier this year. As a result, July's sales were still 4.3 percent lower than a year ago. They also remain below the 5.5 million considered consistent with a healthy housing market.
Still, the rise in home sales comes after other encouraging data show that the housing market is improving. Steady job gains and rising consumer confidence have led more Americans to purchase homes. That's a contrast from earlier this year, when weak sales and limited homebuilding led economists to peg housing as a missing piece of the economic recovery. Federal Reserve Chair Janet Yellen recently told Congress that housing has been disappointing this year.
But new-home construction surged 15.7 percent in July to a seasonally adjusted annual rate of 1.09 million homes, the government said Tuesday.
And applications for building permits, considered a good sign of future activity, also showed strength in July, advancing 8.1 percent to an annual rate of 1.05 million after declining in the prior two months.
The Realtors report also showed that an increasing share of sales are healthy ones. Fewer home sales stemmed from foreclosures or involved homes where the seller owed more on their mortgage than the home was worth. Those "distressed" sales made up just 9 percent of sales, the lowest proportion since the Realtors began tracking the figure in October 2008. Distressed sales, which are usually at much lower prices, made up 36 percent of sales in 2009.
Home prices are increasing at a slower clip, which should help ease affordability pressures.
Data provider CoreLogic said that prices rose 7.5 percent in June compared with 12 months earlier. That's the smallest year-over-year gain in 20 months.
And average rates for 30-year mortgages fell to 4.12 percent from 4.14 percent, mortgage company Freddie Mac said last week. Mortgage rates are below recent peaks of about 4.5 percent at the beginning of the year.