Existing-home sales spiked 6.5% in July, showing a double-digit year-over-year increase in the median price, according to data released Wednesday by the National Association of Realtors.
Total sales rose in July to a seasonally adjusted annual rate of 5.36 million, up from June’s 5.06 million. Sales are up 17.2% from July of 2012.
NAR Chief Economist Lawrence Yun cautioned that rising interest rates could impact the market down the line.
“Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines,” he said. “The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers.”
According to Freddie Mac, the average rate for a 30-year fixed-rate mortgage rose to 4.37% in July, up from 4.07% in June, and the highest since July 2011’s rate of 4.55%.
However, Yun said other factors could compensate for future rate spikes.
“Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalizeover time from current stringent conditions as default rates fall,” he said.
The national median existing-home price spiked to $213,500 in July, 13.7%higher than July 2012. July’s spike marks 17 consecutive months of year-over-year price increases on existing homes. Distressed homes accounted for 15% of July sales, down from 24 percent in July 2012.