Homeowners plunged into the housing market in June as the January and February slowdown was put to final rest by the fastest pace of sales in eight years.
Sales on previously occupied homes, tracked at closing, rose 3.2 percent to a 5.49 million annualized rate, the highest since February 2007, reported the the National Association of Realtors today. Home purchases normally close within two months of contract. Econmists in the Bloomberg survey had forecast a sales rate of 5.40 million.
The national median selling price climbed to $236,400 a record in the 16 year history of the series. Inventory rose slightly to 2.30 million homes from 2.28 million in May, but the number of months it would take to clear at the current selling rate dropped to 5.0 from 5.1 due to the faster sales pace.
The housing market has improved in recent months. The selling rate in May and June, 5.41 million units, was 11 percent higher than the 4.86 million annual rate in the first two months of the year.
Rising demand has been driven by confidence in the job market, mortage rates at near historic lows and a modest increase in the rate of household formation.
Even with the boost of the past few months the average monthly sales rate of the past two and a half years, 5.03 million units will probaly need a sustained improvement in wages to keep the housing recovery on track. Since the end of the recession annual wage growth has been just marginally higher than the rate of inflation.
For most people a home is the largest purchase they will make and the long term prospects of their wages is the most important consideration after employment.
Chief Market Strategist
WorldWideMarket Online Trading