Low rates push US home sales up almost 25%

SILVER SPRING, Md. — Spurred by ultra-low mortgage rates, homebuyers rushed last month to snap up a limited supply of existing houses, causing the pace of purchases to jump by a record-high 24.7%.

The July surge in sales reported Friday by the National Association of Realtors marked the second straight month of accelerating home purchases. The back-toback increases have helped stabilize the homebuying market, which all but froze early this spring when the coronavirus pandemic erupted across the United States.

With July’s increase, to a seasonally adjusted annual rate of 5.86 million, purchases of existing homes are up 8.7% from a year ago. Near record-low mortgage rates have made homes more affordable for buyers, and many are acting to capitalize on them. The average rate on a 30-year fixed rate mortgage is 2.99%, the mortgage buyer Freddie Mac said Thursday. A year ago, it was 3.55%.

The figures also point to a persistently unequal recovery: Many higher-paid whitecollar workers, who have disproportionately kept their jobs and can work remotely, are able to buy homes.

By contrast, renters are more likely to work in lower-paying service jobs at restaurants, hotels, gyms and hair salons, where layoffs have been rampant and their ability to pay rent is declining. The expiration of a federal moratorium on evictions has also raised their risk of losing their home.

In a few of the country’s most expensive housing markets — notably New York and San Francisco — real estate professionals say they’re seeing more people leaving high-priced city apartments to buy homes in outer suburbs. The loss of urban amenities and concern that the risk of infection is higher in denser areas may be contributing to that trend.

But nationally, an analysis by Zillow has found, urban and suburban areas are showing similar strength. Many suburbs are become hot home sellers’ markets, Zillow said, but so have many urban areas.

An unusually sparse supply of homes is helping fuel demand and keeping sales lower than they might be.