Home Sales Hit Best Level Since February 2007; Problems Ahead?

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Despite the rapid increase in mortgage rates and higher home prices, existing-home sales in August were better than expected, reaching their best level in more than six years.

The National Association of Realtors announced Thursday that total existing-home sales, which are completed transactions of single-family homes, town homes, condos, and co-ops, rose 1.7 percent to a seasonally adjusted annual rate of 5.48 million units last month. In comparison, July showed an annual rate of 5.39 million units.

Economists only expected a pace of about 5.25 million units. The surprise beat was a sharp turnaround from June, which posted the biggest miss in a year. Existing-home sales are up 13.2 percent from the 4.84 million-unit level seen a year earlier. Sales are at their highest level since February 2007, when sales reached 5.79 million units. Total sales have now been above year-ago levels for 26 consecutive months.

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