Existing-home sales climbed to their highest pace of the year in July as slower price growth inspired more purchases, the National Association of Realtors reported.
The trade organization on Thursday reported total existing-home sales jumped to a seasonally adjusted annualized rate of 5.15 million in July from the downwardly revised 5.03 million annual rate in June. Observers had predicted a 5 million annual rate for July, according to a survey by Bloomberg News.
Lawrence Yun, the association’s chief economist, said tamer price increases are giving prospective buyers “less hesitation about entering the market.”
“More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise,” Yun said.
John Lloyd, global head of credit research at investment firm Janus Capital Group, said the existing-housing data in the second half of this year could provide clues for how strong demand will be for the 2015 spring selling season.
“If we can see some continued momentum in the slower season [later this year], I think that bodes really well for the spring selling season,” Lloyd said.
Total housing inventory at the end of the month grew 3.5% to 2.37 million existing homes available for sale, the association reported. That represents a 5.5-month supply at the current sales pace, unchanged from the supply at the end of June.
The median existing-home price for all housing types totaled $229,000 in July, rising 4.9% from a year ago. While prices continue to climb, appreciation has slowed in recent months as inventory has risen.
Many housing metrics have indicated the housing market is performing well—progressing slowly, but signaling consistent improvement. U.S. home construction reached a nine-month high in July, while home-improvement retailers Home Depot (HD) and Lowe’s (LOW) reported higher quarterly sales this week–a bright spot in retail when many are struggling with poor traffic trends at their brick-and-mortar locations.