Home sales rise to highest level since 2006

U.S. home sales rose 2.4 percent in August, marking the highest level since 2006, according to a report from the National Association of Realtors (NAR).

The 14-year high comes amid the coronavirus pandemic, which ruptured the economy but led the Federal Reserve to lower interest rates, which helped mortgage rates drop to record lows.

The median price of homes purchased in August was $310,600, up 11.4 percent from August 2019, when the median home price was $278,800.

“Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market,” Lawrence Yun, NAR’s chief economist, said in a statement. “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”

The Federal Reserve announced last week that it would leave the baseline interest rate range at zero to 0.25 percent, the level set in March as the economy buckled because of the pandemic.

Existing home sales, which account for the bulk of U.S. home sales, jumped 10.5 percent on a year-over-year basis in August.

However, the housing market continues to see a lack of supply. The housing inventory in August was 1.49 million units, a decline of 18.6 percent from the same time last year.

“Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities,” Yun said. “To assure broad gains in homeownership, more new homes need to be constructed.”