WASHINGTON–Sales of homes hit their fastest pace in a decade during the first quarter, even though prices have been increasing and mortgage rates have ticked up slightly.
According to the National Association of Realtors,
total existing-home sales climbed 1.4% in the quarter to a seasonally adjusted annual rate of 5.62 million, the highest since the first quarter of 2007.
The NAR said its data also show the national median home price jumped 6.9% from the same quarter one year earlier to $232,100, the largest price gain in nearly two years.
Millennials entering the housing market are among the primary drivers of the robust growth.
Meanwhile, there remain sharp disparities between the most and least expensive housing markets. A mid-price home in San Jose, Calif.—the most expensive metro area in the country, for instance, now costs $1.07 million, while the typical home in the cheapest market—Youngstown, Ohio—costs just $79,200.
Home prices in San Jose increased 10% over the past year, while prices in the Youngstown area increased 4% during that time, the NAR said.
The increase in home sales comes at the same time that homebuilding activity has actively declined. According to the Commerce Department, homebuilding unexpectedly declined in April to the lowest level in five months amid persistent weakness in the construction of multi-family housing units.
Housing starts dropped 2.6% to a seasonally adjusted annual rate of 1.17 million units also as single-family homebuilding rebounded modestly, the Commerce Department said. April's reading was the lowest level since last November and followed a downwardly revised rate of 1.20 million units in March.