WASHINGTON (AP) — U.S. home sales rose 1.3% in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying.
The National Association of Realtors said Thursday that homes sold last month at a seasonally adjusted annualized rate of 5.49 million units, the best performance since March 2018. Sales have increased 2.6% from a year ago. Cheaper borrowing costs have increased affordability for buyers, but they have also led to higher prices amid a shortage of properties for sale.
The median sales price climbed 4.7% from a year ago to $278,200, outpacing average wage gains.
Homebuyers have been a beneficiary from the recent economic uncertainty, as interest rates have fallen in response to slower global growth and President Donald Trump's tariffs against China.
The 30-year mortgage rate averaged 3.56% this week, down from 4.6% a year ago, according to mortgage buyer Freddie Mac.
Still, the upside is limited by a decline in sales listings. There were 1.86 million properties for sale at the end of August, down 2.6% from a year ago.
The inventory crunch appears to be most pronounced in starter homes priced below $250,000, the kinds of properties that are generally affordable for first-time buyers. Sales of homes worth less than $250,000 have fallen in the past year, while sales of home priced between $250,000 and $1 million have risen.