The Commerce Department's report on housing starts was another indication… (Mark Humphrey, Associated…)
WASHINGTON — The rebound in the U.S. housing market accelerated in August as residential construction starts increased 2.3% and sales of existing homes rose 7.8%.
The National Assn. of Realtors said sales of previously owned single-family homes, town houses, condos and co-ops rose to a seasonally adjusted annual rate of 4.82 million units in August, up from an annual rate of 4.47 million in July. The rate exceeded analysts' expectations.
The national median sale price was $187,400 in August, up 9.5% from a year earlier. It was the biggest year-over-year increase since January 2006, shortly before the housing bubble burst. August marked the sixth straight month of year-over-year price increases, which had not happened since early 2006, the Realtors group said.
At the same time, the Commerce Department reported that privately owned housing starts rose to a seasonally adjusted annual rate of 750,000, up 2.3% from the July rate of 733,000. Although that figure was below analysts' expectations, it was another indication that the real estate sector was bouncing back after apparently hitting bottom.
"The housing market is steadily recovering with consistent increases in both home sales and median prices," said Lawrence Yun, chief economist for the Realtors association. "More buyers are taking advantage of excellent housing affordability conditions."
The Federal Reserve said last week that it would try to support that recovery — and, in turn, drive down the high unemployment rate — by launching another round of bond-buying designed to cut already historically low mortgage rates.
The average interest rate for a 30-year fixed mortgage was 3.6% in August, up from a record-low 3.55 in July, according to Freddie Mac. But the August rate was well below the 4.27% figure for a year earlier.
Although it remains difficult for many people to qualify for a mortgage, the housing market is strengthening because of pent-up demand, Yun said.