Sales Pace for Existing Homes at 6-Year High

Sales of existing homes climbed to their highest level in almost six years in August as declining interest rates and stable home prices continued to lure buyers, a real estate trade group said Wednesday.

The National Assn. of Realtors said sales of previously owned single-family homes soared by 9.2% in August to an annual rate of 3.43 million units. It was the fastest sales pace since a rate of 3.48 million units in November, 1979.

“Clearly, the demand for housing remains strong, and today’s lower interest rates are allowing an increasing number of families to realize the American dream of homeownership,” said David D. Roberts, president of the real estate association.

Jack Carlson, the association’s chief economist, said a drop in mortgage rates of about 1.5 percentage points in the past year and moderate price increases have combined to make housing affordable once again for many families.

The median price of a home declined in August, falling $300 to $77,100, although that level was still 4.9% higher than a year ago. The median price means that half the homes sell for more and half for less. Carlson said home prices often fall in late summer and early autumn as anxious sellers reduce prices as the peak buying season draws to an end.

Carlson predicted that 3.06 million existing homes would be sold this year, up 6.6% from the 1984 level.

The 9.2% increase in August sales followed a 2.6% gain in July and a 0.7% advance in June. It was the fifth-largest month-to-month gain in the 17-year history of the monthly survey, officials said.

The rise was paced by a 20.4% jump in sales in the West, which came following relatively sluggish sales activity in the region for much of this year. The Northeast posted a 13.3% increase in August, followed by gains of 8% in the South and 2.2% in the Midwest.