Mortgage rates boosted US home sales 1.3% in August

WASHINGTON (AP) — U.S. home sales rose 1.3% in August to the highest level in 17 months, as mortgage rates near historic lows have spurred a rush of home-buying.

The National Association of Realtors says homes sold last month at a seasonally adjusted annualized rate of 5.49 million units, the best performance since March 2018. Sales have increased 2.6% from a year ago. Cheaper borrowing costs have increased affordability for buyers, but they have also led to higher prices as there is a shortage of properties for sale.

The median sales price climbed 4.7% from a year ago to $278,200, outpacing average wage gains.

Economic uncertainty has reduced interest rates, helping homebuyers. The 30-year mortgage rate averaged 3.56% this week, down from 4.6% a year ago, according to mortgage buyer Freddie Mac.