Sales of existing U.S. homes jumped more than forecast in July to the highest level in almost two years, signaling the housing crisis that crippled the world’s largest economy is easing.
Purchases of both Condos and Homes climbed 7.2 percent to a 5.24 million annual rate, the most since August 2007, the National Association of Realtors said today in Washington. The Real Estate gain was the biggest since records began in 1999. The median price fell 15 percent
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Foreclosure-driven declines in prices, government credits for first-time buyers and near-record-low borrowing costs may keep stoking demand, helping the economy recover from the worst recession since the 1930s. At the same time, more Americans will probably lose their homes as companies cut payrolls, indicating a rebound will be slow to take hold.
“More and more buyers are becoming convinced that there is not a lot of downside left in the housing market,” said a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “We can count on housing no longer being a drag. The economic recovery is on track.”
Stocks jumped and Treasury securities dropped after the report added to evidence the housing market was turning.
Existing home sales were forecast to rise to a 5 million annual rate, according to the forecast of 64 economists in a recent survey. Estimates ranged from 4.8 million to 5.25 million. June’s pace was unrevised at 4.89 million.
Sales had reached a 4.49 million pace in January, their lowest level since comparable records began in 1999.
Purchases of existing homes increased 5 percent compared with a year earlier. The median price dropped to $178,400 from the $210,100 in July 2008.
“We are bouncing back,” the NAR’s chief economist, said in a press conference. Even so, “we still need to wait until year-end before we see price stabilization.”
The number of previously owned unsold homes on the market jumped 7.3 percent to 4.09 million in July, a “notable” increase that exceeded the historical average for the month. Sellers who were waiting for the market to turn may now be putting their houses up for sale.
The share of homes sold as foreclosures or otherwise distressed properties held at 31 percent in July.
Today’s report showed sales of existing single-family homes increased 6.5 percent to an annual rate of 4.61 million. Sales of condominiums and co-operatives climbed 13 percent to a 630,000 rate.
Purchases increased in three of four regions, led by a 13 percent jump in the Northeast.
The figures are compiled from contract closings and may reflect purchases agreed upon weeks or months earlier. Many economists consider new -home sales recorded when a contract is signed, a more timely barometer of the market.
The Toronto Real Estate Market continues to increase month over month this year in volume and average price in the resale market. Toronto Condos continue to increase in share as these luxury Condos provide first time buyers and new visitors to Toronto the ideal setting throughout the city for transportation and employment.