US Existing Home Sales Jump to 2-Year High

The National Association of Realtors has announced that existing home sales increased 7.8 percent last month to an annual rate of 4.82 million units.

That was the fastest annual rate since May 2010. While the broader U.S. economy appears to be losing steam, housing has gained traction and has become a relative bright spot.

Nationwide, the median price for a home resale rose to $187,400 in August, up 9.5 percent from a year earlier as fewer people sold their homes under distressed conditions.

Sales have been creeping up and the house price decline has bottomed, with a tightening supply of properties on the market raising prices in some metropolitan areas.

Distressed homes - foreclosures and short sales sold at deep discounts - accounted for 22 percent of August sales (12 percent were foreclosures and 10 percent were short sales), down from 24 percent in July and 31 percent in August 2011.

The distressed home inventory is shrinking. As I have been advising in the EPJ Daily Alert, those considering buying a home should do so now. Prices have stopped going down and if Bernanke's latest QE operation enters the system as opposed to going into excess reserves, housing prices are going to soar. Further, mortgage rates are very near their lows. Lock in these rates by taking out a mortgage for as long as you can get. Bernanke is playing around with the mortgage rate, but he won't be able to do it much longer.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.60 percent in August from a record low 3.55 percent in July; the rate was 4.27 percent in August 2011.