Home sales surge thanks to low rates and high demand
SILVER SPRING, Md. — Spurred by ultra-low mortgage rates, home buyers rushed last month to snap up a limited supply of existing houses, causing the pace of purchases to jump by a recordhigh 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-to-back increases have helped stabilize the home-buying market, which all but froze early this spring when the viral pandemic erupted across the U.S.
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 now 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, in some cases far from their employers’ headquarters.
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.
S&P 500 hits another record
The S&P 500 ticked higher to close at another all-time high Friday, powered by strength for technology stocks and a couple of reports on the U.S. economy that were better than expected.
The benchmark index, which surpassed its record close set on Tuesday, rose 11.65 points to 3,397.16.
A report from IHS Markit on Friday said preliminary data suggests output from the U.S. private sector is at an 18-month high and sales of previously occupied homes were also stronger in July than economists expected.
Tech continues to churn out big profits as work-from-home and other tech-friendly trends accelerate.