The month of June saw the fastest pace of U.S. home sales in five years, alluding to continued signs of recovery in the national housing market. Additionally, newly built home sales rose 8.3 percent last month, which equates to an annualized rate of 497,000, according to the Department of Commerce. Although still below the annual mark correlating with healthy markets of 700,000, home sales have risen 38 percent in the past 12 months. This represents the highest annual gain since January 1992. According to Jonathan Basile, Economist for Credit Suisse, “there is a lot more headroom for more gains in new-home sales once the job market recovers more fully.” One concern that may impede the continued improvement in sales pace is rising mortgage rates. The average rate on 30-year fixed loans was 4.37% last week, which is one percentage point higher than the mortgage rate in the month of May. The biggest reason for this surge in mortgage rates is the Federal Reserve’s announcement that it could reduce bond buying later this year if the economy continued to improve. The Federal Reserve’s bond buying program has kept long-term interest rates low, which has fostered growth.
Health in home sales
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