U.S. home prices reach six-year high

Buyers cautious as mortgage rates rise

Sales of previously owned homes rose in August, reaching the highest level in more than six years, according to a new report.

Sales of existing single-family houses, townhomes, condos and co-ops climbed 1.7 percent on a seasonally adjusted annual rate from July, the National Association of Realtors said Thursday. August's rate of 5.48 million units is 13.2 percent ahead of the same month last year.

The median sale price for resale homes rose 14.7 percent from last year to $212,100, the biggest year-over-year gain since the bubble days of 2005.

The housing recovery has shifted into overdrive this year, fueled in large part by historically low interest rates, a lack of available homes and an improving economy.

But one wild card has been the recent rise in mortgage rates, which have climbed more than 1 percentage point since the beginning of May.

That increase drove more buyers to close on homes in August, said the Realtors group's chief economist, Lawrence Yun, who added that sales may be nearing a temporary peak.

"Monthly sales are likely to be uneven in the months ahead from several market frictions," he said in a statement. "Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn't as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase."

Regionally, sales increased in the Midwest and South. They stayed flat in the Northeast, while declining in the West.

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