Despite rising home prices and mortgage interest rates, a total of about 5.36 million existing homes were sold in the third quarter – a 5.9% increase, on a seasonally adjusted basis, over the 5.06 million sold in the second quarter, and 13% above the 4.74 million sold during the third quarter of 2012, according to the National Association of Realtors (NAR).
Sales were at the highest pace since the first quarter of 2007, when they reached 5.66 million, the company reports.
Existing-home sales increased year-over-year in 144 out of 163 (88%) metropolitan statistical areas (MSAs) measured by NAR in the third quarter.
The increase occurred despite the fact that existing-home prices rose in most areas. The national median existing, single-family home price was $207,300 in the third quarter, up 12.5% from $184,300 in the third quarter of 2012, the firm reports. This was the strongest year-over-year increase since the fourth quarter of 2005, when home prices jumped 13.6%.
Fifty-four of the MSAs tracked – or 33% – had double-digit increases, while 19 had price declines in the third quarter.
The increase in existing home sales also came despite rising interest rates. According to Freddie Mac, the national commitment rate on a 30-year, conventional fixed-rate mortgage averaged 4.44% in the third quarter, up from 3.69% in the second quarter and 3.54% in the third quarter of 2012; the commitment rate is at the highest level since the second quarter of 2011, when it averaged 4.66%.
‘Rising prices and higher interest rates have taken a bite out of housing affordability,’ says Lawrence Yun, chief economist for NAR, in a release. ‘However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.’
The five most expensive housing markets in the third quarter were the San Jose, Calif., metro area, where the median existing single-family price was $805,000; San Francisco, $705,000; Honolulu, $679,800; Anaheim-Santa Ana, Calif., $670,700; and San Diego, $485,000.
The five most affordable metro areas were Toledo, Ohio, with a median single-family price of $87,500; Rockford, Ill., at $88,900; Decatur, Ill., $91,000; Ocala, Fla., $103,600; and Topeka, Kan., $106,900.
For more, check out the full report.