ALBUQUERQUE, N.M. — U.S. home sales rose 1.3% in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying around the country and in New Mexico.
The National Association of Realtors said Thursday that homes sold last month at a seasonally adjusted annualized rate of 5.49 million units, the best performance since March 2018. Sales have increased 2.6% from a year ago.
In New Mexico, the housing market is still showing no signs of slowing down. The New Mexico Association of Realtors this week predicted 2019 will be the second-best year for home prices in the Land of Enchantment since 2008, on the back of strong growth in August.
Through August, 16,915 properties have been reported sold, more than 2,000 more than were sold over the same period in 2017, according to association president Paul Wilson.
That total trails only 2018, when 21,429 properties were sold between January and August, Wilson said in a prepared statement.
Meanwhile, New Mexico home prices continue to rise. Through August, the statewide median home price in 2019 is $215,000, the highest since 2008, according to the association. In August, 2,514 New Mexico properties were reported sold, with a median price of $221,000.
The recent bump in home sales across the country is a sign of U.S. consumers’ resilience despite a darkening outlook for growth. Cheaper borrowing costs have improved affordability for buyers, making them more eager to buy despite rising prices amid a shortage of properties for sale.
“Consumers seem to still be confident in their finances, and are clearly feeling good enough to make large purchases such as buying a home,” said John Pataky, executive vice president at TIAA Bank. “The prolonged period of low mortgage rates has helped pull buyers off the sidelines by making home purchases a more affordable proposition.”
The national median sales price climbed 4.7% from a year ago to $278,200, outpacing average wage gains.
Homebuyers have been a beneficiary from the recent economic uncertainty, as interest rates have fallen in response to slower global growth and President Donald Trump’s tariffs against China.
The 30-year mortgage rate averaged 3.73% this week, down from 4.65% a year ago, according to mortgage buyer Freddie Mac.
Still, the upside is limited by a decline in sales listings. There were 1.86 million properties for sale at the end of August, down 2.6% from a year ago.
The inventory crunch appears to be most pronounced in starter homes priced below $250,000, the kinds of properties that are generally affordable for first-time buyers. Sales of homes worth less than $250,000 have fallen in the past year, while sales of home priced between $250,000 and $1 million have risen.