US existing home sales near 8-1/2-year high

[WASHINGTON] US home resales rose in June to their highest level in nearly 8-1/2 years, a sign of pent-up demand that should buoy the housing market recovery and overall economy.

The National Association of Realtors said on Wednesday existing home sales increased 3.2 per cent to an annual rate of 5.49 million units, the highest level since February 2007.

Existing sales this year are on track to record their biggest gain in eight years, the NAR said. May's sales pace was revised slightly down to 5.32 million units from the previously reported 5.35 million units.

Economists polled by Reuters had forecast home resales rising to a 5.40 million-unit pace last month. Sales were up 9.6 per cent from a year ago.

June's solid home sales report came on the heels of last week's strong housing starts and building permits data. A tightening labour market is starting to push up wages, helping to boost demand for housing, especially among young adults. But supply remains a constraint.

The string of strong housing reports indicate the economy remains on firmer footing despite a drop in retail sales and a slowdown in job growth last month.

REUTERS