September 9, 2013 Updated: September 9, 2013 at 5:00 pm
Rising mortgage rates might have led to a slowdown in local homebuilding last month, but they didn't faze the Colorado Springs-area re-sale market as home sales and prices increased in August, according to a report by the Pikes Peak Association of Realtors.
Sales of single-family homes totaled 1,105 last month, up 23.1 percent from August 2012, the association report showed. Year-over-year sales have increased for 14 straight months.
For the first eight months of the year, home sales totaled 7,641, a nearly one-quarter increase over the same period in 2012.
The median price - or mid-point - of homes that sold in August was $220,000, a 4.5 percent increase from the same month last year. Prices have risen each month for the last 1 1/2 years.
Long-term mortgage rates that have climbed above 4 percent haven't been enough to deter buyers, said Joe Clement, broker-owner of Re/Max Properties in Colorado Springs. Some homebuyers who missed out when rates were around 3.5 percent recognize that current rates of 4.25 percent to 4.5 percent are still historically low and very attractive, he said.
"It's just not that big of a jump," Clement said. "That's not holding people back. Everybody knew that (rates of 3.5 percent or less) wasn't going to last forever, so, when it changed, it was no huge surprise."
Some buyers probably were motivated by rising rates, Clement said. Multiple Listing Service statistics show that completed purchases, or closings, typically totaled 150 to 250 a week in August, Clement said. But during the last week of the month, closings accelerated to 300 - a sign that buyers wanted to get on board before rates went any higher, he said.
Long-term mortgage rates had been well below 4 percent for much of 2012 and through the first half of 2013, according to mortgage buyer Freddie Mac. But since late June, rates for 30-year, fixed-rate mortgages have climbed above 4 percent; last week, they averaged 4.57 percent nationally.
When the pace of local homebuilding dipped in August, some builders speculated last week that the slowdown was a result of higher mortgage rates.
Meanwhile, as prices and sales continue to increase, more sellers are putting their homes on the market. The supply of homes listed for sale in August totaled 4,251 or 10 percent more than a year ago.
An increasing inventory of homes for sale might be a good thing for the market; after monthly listings had fallen to around 3,000, some real estate agents had said buyers needed a bigger selection from which to choose.
The Realtors Association report is based on home sales whose transactions are handled by its members and not individual owners.
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