Sales of existing homes in August reached a 5.48 million-unit annual pace, the highest sales rate since February 2007. Total sales have remained above year-ago levels for the past 26 months, driven by 18 consecutive months of year-over-year price increases.

Existing-home sales reached the highest level in six-and-a-half years in August, rising 1.7 percent to a seasonally adjusted annual rate of 5.48 million in August from 5.39 million in July, according to the National Association of Realtors.

Total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, are 13.2 percent higher than the 4.84 million-unit level in August 2012. Single-family home sales rose 1.7 percent to a seasonally adjusted annual rate of 4.84 million in August from 4.76 million in July, and are 12.8 percent above the 4.29 million-unit pace in August 2012.

Lawrence Yun, NAR chief economist, said the market might be experiencing a temporary peak. "Tight inventory is limiting choices in many areas, higher mortgage interest rates mean affordability isn't as favorable as it was, and restrictive mortgage lending standards are keeping some otherwise qualified buyers from completing a purchase," Yun said. "Monthly sales are likely to be uneven in the months ahead."

The national median existing-home price for all housing types was $212,100 in August, up 14.7 percent from August 2012. This is the strongest year-over-year price gain since October 2005 when the median rose 16.6 percent, and marks 18 consecutive months of year-over-year price increases and nine consecutive months of double-digit year-over-year increases. The median existing single-family home price was $212,200 in August, which is 14.4 percent higher than a year ago.

Inventory & Distressed Homes
Total housing inventory at the end of August increased 0.4 percent to 2.25 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, down from a 5.0-month supply in July. Unsold inventory is 6.3 percent below a year ago, when there was a 6.0-month supply.

The median time on market for all homes was 43 days in August, little changed from 42 days in July, but much faster than the 70 days on market in August 2012. Short sales were on the market for a median of 98 days, while foreclosures typically sold in 52, days and non-distressed homes took 41 days. Forty-three percent of homes sold in August were on the market for less than a month.

Distressed homes – foreclosures and short sales – accounted for 12 percent of August sales, down from 15 percent in July, and is the lowest share since monthly tracking began in October 2008; they were 23 percent in August 2012. Ongoing declines in the share of distressed sales are responsible for some of the growth in median price.

Eight percent of August sales were foreclosures, and 4 percent were short sales. Foreclosures sold for an average discount of 16 percent below market value in August, while short sales were discounted 12 percent.