WASHINGTON, July 22 (UPI) -- Existing home sales grew in June to an eight-month high, a sign the housing market is improving on account of lower mortgage rates and higher supply.
Sales were up 2.6 percent to a seasonally adjusted annual rate of 5.04 million homes in June, as figures from the National Association of Realtors showed Tuesday. Analysts surveyed by Bloomberg estimated a sales rate of 4.8 million to 5.1 million.
Already-owned home sales were boosted by the slowest increase in prices since March 2012 and an increase in home inventories. But sales remain lower than last year, even though inventories increased in June, and it remains tight, according to the Association.
The median price of existing homes last month increased 4.3 percent year-on-year to $223,300. Mortgage company Freddie Mac said rates have fallen to 4.13 percent for a 30-year mortgage.
The Federal Reserve is closely monitoring the housing market as it decides on the appropriate time to tighten monetary policy, which hasn't changed much since the start of the financial crisis in 2008.
"The housing sector ... has shown little recent progress," Fed Chair Janet Yellen said in testimony before Congress last week. "While this sector has recovered notably from its earlier trough, housing activity leveled off in the wake of last year's increase in mortgage rates, and readings this year have, overall, continued to be disappointing."
Despite the encouraging numbers, the housing market continues to face hurdles, including shortages in construction and labor as well as still-high mortgage rates.