The National Association of Realtors said sales of existing homes in the U.S. rose 1.3 percent in July, ending four months of declines. Reuters writes. The increase is due to improved housing affordability and falling mortgage interest rates. Economists had forecast 3.93 million units, but actual sales came in at 3.95 million units.

The median price of an existing home rose 4.2 percent from last year to $422,600, with prices rising in all four U.S. regions. Homes for resale account for the majority of U.S. home sales and fell 2.5 percent year over year in July.

positive trend

The average interest rate on a 30-year fixed-rate mortgage was 6.49 percent last week, a 15-month low and half a percentage point lower than the same period last year. Lower interest rates make housing more affordable for consumers.

Housing starts rose 0.8 percent to 1.33 million units last month. Supply is up 19.8 percent from a year ago, as rising insurance premiums forced some homeowners to put their homes on the market.

Despite this increase in supply, there is a shortage of entry-level homes and not enough new construction. Single-family home construction fell to a 16-month low in July, pressured by Hurricane Beryl and an oversupply of new homes.

The current inventory of existing homes will take about 4.0 months to decrease at the current sales pace, compared to 3.3 months a year ago. Homes stayed on the market for 24 days in July, compared to 20 days a year ago.

Key points

• US existing home sales rose 1.3 percent in July, reversing four consecutive monthly declines.
• The median price of an existing home rose 4.2 percent from a year earlier to $422,600.
• Housing stock rose 0.8 percent last month to 1.33 million units.

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