GO
Loading...

Existing home sales spike in July as Philly manufacturing rockets

Andy Dean | iStock / 360 | Getty Images

Americans resold their homes in July at the fastest pace in almost a year, a sign the housing market was gaining steam again after a year-long slump.

The National Association of Realtors said on Thursday existing home sales increased 2.4 percent to an annual rate of 5.15 million units. That was above analysts' expectations and marked the fourth straight month the pace of home resales accelerated.

Home resales dropped in the summer of 2013 after the Federal Reserve signaled it would dial back its monetary stimulus for the economy, pushing mortgage interest rates higher.

Read MoreFactory activity expands at fastest pace in 4 years

The Fed, however, ended up keeping a bond-buying program running at full throttle for longer than investors expected, and mortgage rates edged lower again. This, coupled with robust job growth this year, helped push home resales in July to their highest level since September 2013.

Distressed sales, which include foreclosures and short sales, made up only 9 percent of sales last month, the lowest share since the NAR starting tracking this information in October 2008.

More homes also are being put on the market, keeping prices from rising as quickly and providing potential buyers with more choices.

The number of homes on the market for resale rose to 2.37 million in July, the highest level since August 2012 and 5.8 percent more than in July of last year.

The median sale price was $222,900, 4.9 percent higher than in July 2013.

Manufacturing barrels higher

A separate report showed that factory activity in the U.S. mid-Atlantic region expanded in August to its highest level since March 2011, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index rose to 28.0 from 23.9 the month before. That topped economists' expectations for a reading of 19.2, according to a Reuters poll.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware. It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.

Separately, The Conference Board said that its Leading Economic Index increased 0.9 percent last month after an upwardly revised 0.6 percent rise in June. Economists polled by Reuters had expected the index to gain 0.6 percent after June's previously reported 0.3 percent increase.

"The economy is gaining traction and growth should continue at a strong pace for the remainder of the year,'' said Ataman Ozyildirim, an economist at The Conference Board. "Although housing has been one of the weakest components this year, the sharp gain in building permits helped boost the LEI in July.''

--By Reuters

Contact Economy

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*