"Housing will be an important part of the recovery through the rest of this year and into 2014"
- Gus Faucher, senior economist at PNC Financial Services Group Inc.
The number of sales of previously owned homes in the U.S. soared to the highest level since November 2009, as more buyers entered the market before the expected increase in mortgage rates. According to the National Association of Realtors, sales of existing homes remained above the five-million threshold for the third month in a row, rising 6.5% last month, hitting 5.39 million units, and beating market projections of a 1.4% advance. The previous month's figure was downwardly revised to 5.06 million. As the average rate on a 30-year mortgage crossed 4% mark, and is expected to climb even further, buyers were forced to close contracts as fast as possible.
Meanwhile, the minutes of the FOMC's July 30-31 meeting provided some clues on potential timing of slowing the Fed's bond buying scheme. A few central bank's officials believed that reduction of QE3 might be needed soon, while the majority assumed that changes in the monetary stimulus programme was not yet appropriate, highlighting the necessity of being patient and assessing economic data before deciding on any critical move. Almost all of 12 policy makers were broadly comfortable with Fed Chairman Ben Bernanke's plan to moderate the pace of asset purchase later this year if the economy continue to strengthen.
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