(Bloomberg News) Sales of existing homes rose more than forecast in August to a two-year high, an additional sign the U.S. housing market is gaining traction in the second half of the year.
Purchases of previously owned houses increased 7.8 percent to a 4.82 million annual rate, the most since May 2010, figures from the National Association of Realtors showed today in Washington. The median forecast of 78 economists surveyed by Bloomberg called for sales to increase to a 4.56 million pace. Another report showed construction began on more single-family homes last month than at any time in the past two years.
Benefitting from record-low mortgage rates, more affordable properties and a growing population, the U.S. housing market is starting to climb out of a multiyear slump. Nonetheless, unemployment and tight lending conditions may impede a quicker return to the 5 million to 5.5 million sales pace that the real- estate agents group says constitutes a "normal" market.
"The nascent housing recovery has deepened," said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, who projected sales would climb to a 4.85 million rate. "Ultimately, this improvement will lead to a rise in residential wealth, which tends to lift consumer confidence and spending."
Shares rose after the report showed the housing market was continuing to recover. The Standard & Poor's 500 Index advanced 0.1 percent to 1,461.35 at 10:28 a.m. in New York.
Survey Results
Estimates in the Bloomberg survey ranged from 4.45 million to 4.85 million. The prior month's pace was unrevised at 4.47 million.
Compared with a year earlier, purchases increased 11 percent in August, today's report showed.
The median price of an existing home climbed 9.5 percent to $187,400 from $171,200 in August 2011.
The increase in prices reflects both a reduction in distressed sales and a genuine appreciation in property values, Lawrence Yun, NAR chief economist, said in a news conference today as the figures were released.