Single-family home sales in Northwest Indiana increased 20.7 percent in August, defying a recent surge in home mortgage interest rates.
A total of 987 homes were sold by Northwest Indiana Realtors in August, as compared to 818 homes sold in August 2012, according to the Greater Northwest Indiana Association of Realtors. The median selling price increased 0.7 percent.
In Porter County, home sales surged 30.4 percent in August, with a median selling price of $159,450, according to the association. In Lake County, home sales increased 18.6 percent, with a median selling price of $132,250.
Nationally, home sales overall reached their highest level in 6 1/2 years, rising to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, according to the National Association of Realtors. Home sales nationally are 13.2 percent higher than one year ago.
National Association of Realtors Chief Economist Lawrence Yun said higher mortgage interest rates appear to be heating up sales – for now.
“Rising mortgage interest rates pushed more buyers to close deals, but monthly sales are likely to be uneven in the months ahead from several market frictions,” Yun said. “Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn’t as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase.”
Mortgage interest rates surged above 4 percent for the first time this year in the third week of June, leading to fears home buyers could start to pull back.
But so far, home sales have remained steady in Northwest Indiana and nationally, even with the average mortgage rate on a 30-year home loan hovering between 4.4 percent and 4.6 percent in the month of August, according to weekly surveys performed by federally-backed home mortgage bundler Freddie Mac.
The Greater Northwest Indiana Association of Realtors covers home sales in Lake, Porter, LaPorte, Newton and Jasper counties.