171-300x225Existing home sales have risen to their highest level in more than 8 years, another strong sign that both the housing market and the overall economy continue to make steady gains in their long-awaited recovery.

According to the National Association of Realtors, US home resales rose 3.2% in June – reaching an annual rate of 5.49 million units – the highest since February 2007.

Fueled by more than a year of steady job growth, buyers came back in full force this spring, says NAR Chief Economist Lawrence Yun. May and June’s solid gains in closings helped existing home sales rebound to their strongest level since the beginning of the market downturn. Yun adds that an overall improving economy is giving more households the financial ability and motivation to buy.

Yun also points to the initial phase of rising mortgage rates in the 2nd quarter of 2015 as an incentive for prospective buyers to move more quickly, rather than wait and risk that the rates will go up even more.

The median home price for existing homes (all types) was $236,400 in June – a 6.5% increase over June 2014. This surpasses the peak median sales price in July 2006 of $230,400. The June increase also marks the 40th consecutive month of year-over-year gains.

Limited inventory combined with strong demand is pushing home prices higher, says Yun, which is leading to decreased affordability for would-be home buyers. It is crucial that prospective buyers not delay their search any longer, since unsold inventory is at a 5 month supply at the current sales pace, down from 5.1 months in May.

This Week’s Mortgage Rate Summary:

  • Rates Currently Trending: NEUTRAL
  • Weekly Rate Forecast: NEUTRAL
  • This Week’s Potential Volatility: MODERATE

Bottom Line:

Prospective buyers who’ve been playing the waiting game are urged to talk with their mortgage professional right away to learn more about the risks and rewards of locking a rate or floating down your current one in this highly active market.