Americans bought more homes in July than in June, the latest evidence that the housing market is slowly, but steadily, improving.
Sales of previously occupied homes rose to a seasonally adjusted annual rate of 4.47 million in July, a 2.3 percent increase from the previous month’s rate, the National Association of Realtors said Wednesday.
The industry’s recovery has grown more consistent, though it remains sluggish and uneven. July sales were below the 4.6 million annual pace reached in April and May. And the annual sales pace is below the roughly 5.5 million that economists consider healthy.
Still, sales have increased 10.4 percent compared with a year ago.
The sales increase last month was broad-based. Purchases rose for single-family homes and condominiums. And sales rose in three of four U.S. regions. They were flat in the West.
“Rising single-family home sales indicate that households are feeling increasingly confident taking on larger purchases as their (finances) improve,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said in a note to clients.
The sales gains are being driven in part by higher-priced homes. Luxury home builder Toll Brothers said Wednesday that its net income jumped 46 percent in the May-July quarter.
“We are enjoying the most sustained demand we’ve experienced in over five years,” CEO Douglas Yearley said.
A big reason for the price increase is that sales for pricier homes have picked up, while sales of homes below $100,000 have fallen, the Realtors’ group said.
The number of first-time homebuyers, critical to a housing rebound, rose to 34 percent of sales, up slightly from June. In a healthy market, first-time buyers make up about 40 percent of sales.
Purchases are being restrained by low levels of homes available for sale and by tight credit standards, the Realtors’ group said.
Other recent reports have contributed to the picture of a healing industry. Home prices are rising nationwide. And builders are growing increasingly confident because they’re seeing more traffic from potential buyers. An index of builder confidence rose to its highest level in five years in August.
Builders responded by applying for the largest number of building permits in nearly four years last month. They broke ground on slightly fewer new homes in July than in June. But that was after the number of housing starts had reached a 3½-year high in June.
In July, the number of unsold homes ticked up to 2.4 million. It would take about 6.4 months to exhaust that supply at the current sales pace. That’s just above the six months’ inventory that typically exists in a healthy economy.
Even with near-record-low mortgage rates, many would-be buyers are having difficulty qualifying for loans or can’t afford the larger down payments being required by banks.
Hiring picked up a bit in July, which could support more home sales in the coming months. Job growth helps consumers feel more secure about their finances and typically encourages more of them to buy a house.
Employers added 163,000 jobs last month, the most since February. Job gains had averaged only 73,000 in the April-June quarters, raising fears that the economy was faltering and might even slip into recession.
By CHRISTOPHER S. RUGABER AP Economics Writer