Sales of previously owned US homes jumped in July despite rising mortgage interest rates, with prices continuing to post year-on-year double-digit gains, an industry report said Wednesday.
The National Association of Realtors (NAR) said existing-home sales surged 6.5 percent higher to an annual rate of 5.39 million units in July, rebounding from a June decline to a downwardly revised 5.06 million.
The robust July sales were stronger than analysts expected; the average estimate was for a 5.10 million unit pace.
In a fresh sign of the recovery under way in the housing market, existing-home sales were up 17.2 percent from July 2012, the 25th month that sales have stayed above the year-ago levels.
Tight inventory helped to keep prices rising at an unusually fast pace, the NAR said.
Nationwide, the median existing-home price was $213,500 in July, up 13.7 percent from a year ago.
Although total inventory of homes for sale rose 5.6 percent by the end of July, the sales pace kept the inventory at a 5.1-month supply, unchanged from June.
"Tight inventory in many areas means above-normal price growth for the foreseeable future," Lawrence Yun, NAR chief economist, said in a statement.
The median price has risen at a double-digit pace for the past eight months. In July it was only 7.3 percent below the all-time record of $230,400 in July 2006; two years ago, it was 25.7 percent below the peak.
Yun said that the highest mortgage interest rates in two years were pushing some buyers to close deals, but further rate increases could crimp sales.
In July, the average rate on a 30-year mortgage rose to 4.37 percent from 4.07 percent in June, the NAR said, citing mortgage lender Freddie Mac. That was the highest rate since July 2011, when it was 4.55 percent. A year ago the average rate was 3.55 percent.
Yun, however, highlighted positive factors that can sustain a continued recovery.
"Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall."
Sales rose in all four US regions, led by the Northeast with a 12.7 percent gain.
Sales of single-family homes, the bulk of the US housing market, rose 6.3 percent, and the median price jumped 13.5 percent.
Condominium and co-op sales climbed 8.6 percent and the median condo prices leaped 15.5 percent.
Barclays analyst Michael Gapen pointed to tight inventories holding back sales in recent months but said that factor was easing a bit.
"We continue to expect that existing home sales will gradually improve as labor markets heal and housing demand firms," Gapen said.