U.S. home sales soar despite climbing interest rates

Rising interest rates did little to deter the sale of previously-owned U.S. homes in August. Homebuyers looking to lock in rates before they climbed even further drove purchases up 1.7 percent, marking an annual rate of 5.48 million sales — the most since February 2007, according to figures from the National Association of Realtors.

Transactions begun in June or July, when buyers were angling for mortgage rates at near-record lows, were reflected in the data. But the month was viewed by some as a “last hurrah” before the number of sales begin to reflect a decline related to higher prices and upward-bound mortgage rates. A 30-year home loan rate averaged 4.5 percent in the week ended today, near the highest level sine July 2011, according to data from Freddie Mac cited by Bloomberg News.

“We’ll continue to see increases in home sales and prices, though not as fast as in August,” Gus Faucher, a senior economist in Pittsburgh at PNC Financial Services Group, told Bloomberg.

There were 2.25 million previously-owned homes on the market at the end of August, the lowest number for that month since 2002. Compared to July, when it would have taken five months to sell those houses, it would take 4.9 months at the current sales pace. [Bloomberg News] — Julie Strickland