For the first time since 2009, previously occupied U.S. homes are selling at a pace associated with a healthy market.
Sales jumped 6.5 percent in July to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors said Wednesday. Over the past 12 months, sales have surged 17.2 percent. The trend shows that housing remains a driving force for the economy even as mortgage rates have risen from record lows.
Long Island's housing market is on an upswing, too.
In Nassau County, the number of closed home sales surged 23 percent in July, compared with the same period last year, the Multiple Listing Service of Long Island said last week. In Suffolk County, the number of home sales rose by nearly 22 percent during the same period.
Nationally, buyers have been purchasing previously occupied homes at an annual pace above 5 million for three straight months. The last time that happened was in 2007. Sales are far above the 3.45 million pace of July 2010, the low point after the housing bubble burst. Analysts generally think a healthy sales pace is roughly between 5 and 5.5 million.
Buyers last month weren't dissuaded by higher long-term mortgage rates, which have jumped on average a full percentage point since early May.
The higher rates might have led some potential buyers to buy in July out of fear that rates will rise further.
July's report captures completed sales, which typically reflect mortgage rates that were locked in a month or two earlier. A fuller effect of higher mortgage rates might not be clear until August home sales are reported next month.
Sales could slow later this year, especially if the Federal Reserve scales back its bond purchases. The Fed's bond purchases have kept long-term interest rates, including mortgage rates, historically low.
For now, the average rate on the 30-year fixed mortgage remains low by historical standards. It was 4.4 percent last week.
With Maura McDermott