New home sales have reached a five year high during July across the United States, silencing any doubt that the active Spring Market would slow during the summer months. With the first half of 2013 having performed exceptionally well, the reports of Julys successes has only lifted the expectations for the Third Quarter and rest of the year in the real estate industry to another level.
Despite mortgage rates rising, there has been no inkling of the demand faltering in the marketplace in the slightest. In fact, according to the Commerce Department, single-family homes just increased in sales by 8.3% up to a seasonally adjusted annual rate of 497,000 in July. This, as it comes to be known, was the highest mark since May of 2008. As it turns out, this figure far and away exceeded expectations for July as economists submitted an estimate of there only being 482,000 single-family home sales during that same time. These better than expected numbers can be attributed to the assumption that buyers actively approached the market simply in fear of mortgage rates rising any further. Bob Walters, the Chief Economist at Quicken Loans, commented on this by stating, "The recent increase in mortgage rates hasn't slowed demand as long as home affordability remains high. We are, however, seeing an increased urgency from potential new home buyers as they move to secure today's historically low rates."
While July has proven to be incredibly resilient in furthering the real estate recovery nationwide, June was also just as praiseworthy. Only last month it was found that there was a 38.1% annual increase in single-family home sales between June of 2013 over June from 2012. This, as it turns out, was the most dramatic percentage change on an annual basis since January of 1992 over the same corresponding month from a year prior. It appears as though the real estate climate is in a healthy state. While mortgage rates have gone up by 0.53% recently, they are still far below where they have been by historical standards. Compared to where rates have been in years past, the Fed Chairman Ben Bernanke and other economists agree that the housing sector is stern enough to withstand a slight uptick in borrowing costs, thus prolonged growth in the real estate industry is only set to endure.
More Information: New York Times