Rhode Island August Home and Condo Sales Still Going Strong

    Steady job gains and low mortgage rates have fueled the housing recovery since early last year, helping to improve confidence among consumers, encouraging household spending and generating construction jobs. According to the National Association of Realtors, August home sales rose to the highest level since February 2007, possibly due to buyers reacting to the jump in mortgage rates. August sales reflect contracts signed in June and July, when rates were rising steadily. Locally, the latest figures from RIAR follow suit. Single-family home sales rose 22% in August compared with the same period last year, 926 houses sold, up from 760 last August. The median sales price rose 10% marking the 11th consecutive month of year-over-year price gains. Condominium sales rose a whopping 77% compared with the same period in 2012. 189 condominiums sold last month, up from 107 last August. The median condo sale price fell 2 % to $199,000 in August as the number of distressed condominium sales nearly doubled. The median condominium price last August was $203,000. Year-over-year multifamily sales fell 12% in August. 112 multi-unit buildings sold compared with 127 in August 2012. Fewer distressed sales resulted in the multi-family prices climbing 29% year-over-year to $135,500. The median multi-family sale price in August 2012 was $105,000. This Week’s Real Estate Insight: Mortgage rates have moved up more than a full percentage point since May, and the increase in borrowing costs affects consumer segments differently: A half-percentage point rise in interest rates could mean that some first-time buyers are priced out, while move-up buyers may have a little bit more flexibility, as the equity position of most homeowners continues to improve. Existing home sales may benefit over new construction  because buyers can't lock in a mortgage rate on a home that is under construction.