WASHINGTON – A fourth consecutive monthly increase in sales of existing homes provided the latest evidence Thursday that the U.S. housing market is rebounding from a weak start to the year.
Housing has been a drag on an otherwise strengthening economy, in part because a harsh winter delayed many sales.
But Americans are stepping up purchases as more homes have been put up for sale. And low mortgage rates and moderating price gains have made homes more affordable.
"The momentum is in the right direction," said Andrew Labelle, a TD Bank economist who noted that the past four months have marked the fastest four-month sales gain since 2011. "Sustained jobs gains, as well as the fall in mortgage rates since the beginning of the year, appear to have unleashed at least some pent-up demand."
Sales of existing homes rose 2.4 percent in July to a seasonally adjusted annual rate of 5.15 million, the National Association of Realtors said Thursday. That was the highest annual rate since last September.
Analysts noted that housing has not fully recovered from its slowdown early this year. The annual sales pace remains 4.3 percent below last July’s rate. And construction has merely returned to its pace in October; it has yet to exceed it.
Yet economists say they’re encouraged by signs that the latest sales gains are sustainable.
Stephanie Karol, an economist at IHS Global Insight, said a "virtuous cycle" is emerging: More homeowners are listing their properties for sale. A greater supply of homes then encourages more potential buyers to take the plunge. And that, in turn, helps sustain modest price gains, which lead more people to sell.
"This is exactly the sort of pattern we want to see," Karol said.
The number of homes for sale in July rose 3.5 percent from June to 2.37 million, the most in nearly two years.
Affordability is improving. The median price slipped a bit in July from June to $222,900, the Realtors said. Though that was still 4.9 percent more than a year ago, year-over-year price gains have slowed.