Home sales improved dramatically during the 30-day period ending July 5. This could be an indicator that borrowers are capitalizing on record low mortgage rates to find affordable closing solutions and purchase property.
Sales increased 12 percent from the same time last year, according to a report from DataQuick. An estimated 211,000 units were sold in 98 out of 100 metropolitan statistical areas monitored by the company.
As a result of more transactions and a thinning inventory, median prices increased 6 percent during the same period to $193,000. A month earlier this price point was significantly lower at $186,000, since a lack of non-distressed homes on the market caused a number of buyers to opt for foreclosure and short sales. This trend has held back prices despite improving conditions, but as supplies decline, property values have gone up.
Although property values appreciated, mortgage rates at all-time lows continue to make owning a home a very real option for prospective borrowers. This week, the average rate for a 30-year fixed-rate mortgage was 3.62 percent. Meanwhile, the rate for a 15-year FRM averaged 2.89 percent.