U.S. Home Sales Jump to Highest Level Since May 2010

House for saleBy Christopher S. Rugaber

WASHINGTON -- U.S. sales of previously occupied homes jumped in August to the highest level in more than two years, adding momentum to the housing recovery.

Sales rose 7.8 percent to a seasonally adjusted annual rate of 4.82 million, the National Association of Realtors said. That's the most since May 2010, when sales were fueled by a federal home-buying tax credit.

The figures were reported the same day the government said U.S. homebuilders broke ground on more new homes in August compared to July.

Still, the recovery is from a depressed level. Sales of previously occupied homes remain below the more than 5.5 million that economists consider consistent with a healthy market.

And the number of first-time homebuyers, who are critical to a housing rebound, slipped to 31 percent from 34 percent.

More Americans appear to be taking advantage of near-record low mortgage rates and prices that are, on average, much lower than they were six years ago.

Sales might be higher if more homes were available, the Realtors' group said. The limited supply is helping to lift prices. There were 2.47 million homes available for sale in August. It would take just over six months to exhaust that supply at the current sales pace. That's the typical pace in a healthy market.

The broader economy may also benefit from recent and more sustainable gains in home prices. When that happens, Americans typically feel wealthier and spend more. Consumer spending drives 70 percent of the economic growth.

Wednesday's positive reports follow other signs that there is a sustained recovery in housing under way. Home prices are rising steadily nationwide. Sales of new homes are also picking up. And home builders are more confident and are breaking ground on more new homes.

The National Association of Home Builders/Wells Fargo builder sentiment index, released Tuesday, rose to the highest level in more than six years in September. Customer traffic and sales are at their highest levels since 2006, the peak of the housing bubble.

Even with the gains in home sales, the market remains weak. Many would-be buyers are having difficulty qualifying for loans or can't afford the larger down payments being required by banks.

The Federal Reserve last week moved to push mortgage rates even lower. Fed Chairman Ben Bernanke said the bank would purchase $40 billion of mortgage-backed securities each month until the job market improves "substantially." That could push down longer-term interest rates and spur more borrowing and spending.

The Fed also hopes that lower mortgage rates will accelerate the housing market recovery and boost home prices. That, in turn, could make people feel wealthier and more willing to spend, which would bolster economic growth.

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33 Comments

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glesh52262

why does the FED want home prices to rise to a higher price that most Americans can't afford. They are still to high thanks to the The FED and loan requirenents.

September 19 2012 at 9:02 PM Report abuse rate up rate down Reply
nobarrynmochell

Lower mortgage rates must have made Obama feel richer and in turn he has spent more...more of our money, not his! He is enslaving us going Forward, right over the cliff. We built it and he will destroy it. We worked for it and he will give it away. He lives in public housing and uses public transportation without using one penny of his own money...guess which 47% he belongs to. He is not on our side. He is on the side that wishes to see the USA diminished. Arrogance beyond intelligence is his motto.

September 19 2012 at 8:16 PM Report abuse rate up rate down Reply
TOM

Did we find any weapons of mass detruction yet? Simple explanation for the worse economy since the great depression. Wage 2 wars and cut taxes on the rich. We are all broke except Cheney.

September 19 2012 at 7:55 PM Report abuse +2 rate up rate down Reply
David

Wow! Instead of selling one house, they sold two!!!

September 19 2012 at 7:36 PM Report abuse rate up rate down Reply
cshae89546

The reason sales have jumped is because the lenders are doing the very same thing (Making loans to unqualified buyers.) they did that caused the housing bubble that tanked the economy is 2007. Responsible homeowners need to prepare for another 40% to 50% loss in their home equity becauseFannie mae and the FED are making sure it is on the way.

September 19 2012 at 4:11 PM Report abuse -1 rate up rate down Reply
LISA

Calif will be one of the last housing markets to recover. The bubble was so out of control so I assume construction jobs will be far and few. We moved out of Calif and started all over in a new state that has low unemployment and isn't such a fiscal nightmare. No one politician will fix your problems its up to you! Re-educate yourself so you can move into a field that will have jobs.If your not part of the solution you maybe the problem.

September 19 2012 at 4:06 PM Report abuse rate up rate down Reply
viking9343

I am in the construction bussiness in Southern California. From 2000 through 2007 we had 150 employees (even through 9/11 we didn't get blelow 100). Today we have less then 20.

Liberals can spin how great everything is until they are blue in the face. The fact is American's need jobs and are being squeezed to death by this economy. Too many people are making less and things we need all costs more. Gas is double, food prices up, taxes every way you turn.

Obama has to go.

September 19 2012 at 3:45 PM Report abuse +3 rate up rate down Reply
2 replies to viking9343's comment
kafienkarl

Yeah liberals can spin all they want........whatever dude. so-called conservatives brought us here along with the banks.

September 19 2012 at 8:34 PM Report abuse rate up rate down Reply
Sharon

You are so right, viking9343!

September 19 2012 at 8:36 PM Report abuse +1 rate up rate down Reply
renner1234

Funny thing under Bush each year the home sale were higher.

But thats OK Obama is president and any good news must be reported.

September 19 2012 at 3:29 PM Report abuse +1 rate up rate down Reply
2 replies to renner1234's comment
tonybraciolev

Clueless

September 19 2012 at 3:39 PM Report abuse -1 rate up rate down Reply
kafienkarl

Yup the good old days when anyone could get a mortgage. The "ownership society" as Bush put it. Now look where we are at because of it.

September 19 2012 at 3:41 PM Report abuse rate up rate down Reply
2 replies to kafienkarl's comment
cshae89546

Yeah and if the New York Times article by Holmes written back in September 1999 can be believed the housing bubble began when the Clinton administration pushed Fannie Mae to make loans to unqualified minorities and threatend the private banks with legal action if they did follow along.

September 19 2012 at 3:51 PM Report abuse +1 rate up rate down
tandestreasures

Wrong... it was CLINTON that set this up, Bush warned of the pending collapse but the dems. blocked any changes to pander to their base.

September 20 2012 at 12:34 AM Report abuse +1 rate up rate down
Burberry

I think this is good news! I, however, am a little skeptical as to what is going on where I live. You see, I am a payee rep. for a SSDI recipient. I also have more friends who are on SSDI. They also receive food stamp vouchers and medicaid. I know exactly what they are doing! So I have a much better understanding of what is going on in these programs.

One of my friends on SSDI said his case worker was encouraging him to get out of his father's house and get a Section 8 voucher. His case worker told him they received generous funding in our area and can offer vouchers, I'm assuming, without a waiting list. He wanted to get him into the program immediately.

Now, I come to find out the gorgeous homes in my neighborhood are now being rented out to large families on Section 8. The lawns look like all hell broke loose. The front of the homes look like all hell broke loose. Let's just say it's been very upsetting to me. I have to continually clean garbage up from one of my neighbor's homes who is renting. It smells terrible when I walk by that home.

Just think about it, my neighbors and I purchased these home in good faith believing these homes would not be rented or sold to people who would destroy their property. Many of my neighbors paid up to 500k for their homes. Then you see people coming in to your neighborhood and destroying the property. Big holes in the windows, grass never maintained, garbage and litter all over the place. This is a by-product of Section 8 housing.

My next-door neighbor, who lived here for over 20 years, is so upset he is going to put his home on the market and move. It's not fair that I have to clean up the garbage from these people in my own neighborhood. The smell coming from that one home is unbelievable!

The government is getting these homes filled up with Section 8 recipients because it's going to make it look like there are less homes on the market, so the prices of the homes will eventually rise. It also will make property taxes go up, and then the city can collect taxes from properties that would have been foreclosed on.

It's more profitable to rent a very large home in a gated community to a section 8 recipient. My next-door neighbor told me "they make more money." In fact, the owners of these luxurious homes, who probably would get foreclosed on, can get a whole year's worth of rent from the government in one shot by renting to a Section 8 recipient. However, many homeowners here who paid 300k to 500k don't want this to continue. Just wait until a large family shows up in your neighborhood and starts to tear up it up.

Some of the homes look like crap in gorgeous communities! Imagine, you worked hard for most of your life to have other people come into your neighborhood and make it look like a ghetto on your tax dollar. It doesn't seem fair! So make sure you find out if they allow Section 8 before you buy. If they do, find another place to buy!

September 19 2012 at 3:09 PM Report abuse rate up rate down Reply
1 reply to Burberry's comment
yourbeachdaddy

Sounds like a bunch of monkeys moved in.

September 19 2012 at 5:17 PM Report abuse rate up rate down Reply
thewisnerfamily

It is hard to accept any information on the economy or what either party is spouting. How much can you believe when disinformation got the world economy the way it is. Just working with the people at work is so biased and unfounded even when I work in the hard sciences with very intelligent people.

September 19 2012 at 2:37 PM Report abuse +2 rate up rate down Reply