July Home Sales Set Record; But Some Experts Say Surge Marks Boom's 'Last Hurrah'
Sales of existing homes around the country soared to a new record in July as buyers rushed to take advantage of historically low interest rates. But some economists said the frenzy signaled the peak of the bull housing market.</br></br>"This is the last hurrah for housing," said David A. Lereah, chief economist of the National Association of Realtors, a trade group that compiles the monthly home resale numbers that were released yesterday. "When we look back to this July, we'll say, 'Housing peaked then.' "</br></br>The Realtor group said sales of existing homes shot up 5 percent in July to an annualized 6.12 million units -- an all-time high -- from 5.83 million units in June. The national median existing home price -- $182,000 -- was up 12.1 percent in July from the same month of 2002.</br></br>The July sales reflect the steep drop in interest rates on mortgages in June -- when rates were at their lowest levels in decades -- because the sale of an existing home is recorded only when a property has gone to settlement. Buyers settling in July would typically have entered into a purchase contract in May or June.</br></br>And the fact that interest rates have jumped more than a percentage point since their June lows is what's prompting economists to warn that a softening in the housing market may be inevitable.