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WASHINGTON — U.S. sales of previously occupied homes surged in July to a seasonally adjusted annual rate of 5.39 million, approaching a healthy level for the first time since November, 2009. The spike in sales shows housing remains a driving force for the economy even as mortgage rates rise.
The National Association of Realtors said today that sales jumped 6.5 percent last month from a 5.06 million pace in June. They have risen 17.2 percent over the year.
Sales have now stayed above an annual pace of 5 million for three straight months. The last time that happened was in 2007. And sales are well above the 3.45 million pace hit in July, 2010, the low point after the housing bubble burst.
In northwest Ohio, single-family home sales were up 12 percent in July compared with the same month a year earlier, according to the Toledo Board of Realtors.
The average sales price of $125,446 was 14 percent higher than in July, 2012.
And in even better news, the number of pending sales in July was up a whopping 22 percent over last year, which bodes well for the August and September numbers.
For the first seven months of the year, sales were up 7 percent and the average price was up 8 percent.
The local numbers include only sales involving Realtors, which excludes some for-sale-by-owner transactions and sales of bank-owned homes.
For all of Ohio, sales increased 25 percent in July compared with July, 2012, according to the Ohio Association of Realtors. The average sales price was up 7 percent. For the year, sales are up 17.5 percent and prices are up 6.7 percent.
Home sales jumped in July despite higher mortgage rates, which have risen a full percentage point since early May. Higher rates may have encouraged some potential homebuyers to close deals early.
The July reports capture completed sales, which tend to reflect mortgage rates that were locked in one or two months earlier. So the impact of higher mortgage rates on the market may not be clear until the August report.
Experts say sales could slow later this year, especially if the Federal Reserve scales back its bond purchases. The bond purchases have kept long-term interest rates low.
For now, the average rate on the 30-year fixed mortgage remains low by historical standards. It was just 4.4 percent last week.
Steady hiring and low mortgage rates have helped the housing market recover over the last year. Banks are also slowly easing tight credit standards, which have made it hard for many people to get mortgages.
There were other positive signals in the national report. The proportion of distressed sales including foreclosures stayed at 15 percent, the lowest since the Realtors began tracking the figure in October, 2008.
And investors made up just 16 percent of purchases, down from a recent peak of 22 percent in February. The smaller proportion of investors suggests the market is slowly returning to normal.
One troubling sign: First-time homebuyers aren’t returning to the market. They usually help drive rebounds in home sales. But they made up only 29 percent of sales in July, below the 40 percent consistent with a healthy market.