The sale of existing homes in the U.S. rose for a second straight month, and reached the highest level in 17 months.
The National Association of Realtors said on Thursday existing home sales increased 1.3% to a seasonally adjusted annual rate of 5.49 million units in August, after economists forecast that sales would slightly decline to 5.37 million units.
The number is more important than new home sales because existing home sales make up 89% of the market.
Dramatically declining mortgage rates this summer gave buyers a push. The 30-year fixed mortgage rate dropped from almost 5% last November to 3.5%. The Fed rate cut this week could add more financial fuel to the fire.
But home sales overall have seesawed on a monthly basis for much of this year as the industry continues to struggle with a lack of supply, especially for cheaper homes.
Land and labor shortages have also curtailed building although there have been recent signs of easing. On Wednesday, data showed U.S. homebuilding surged to a more than 12-year high in August as both single- and multi-family housing construction accelerated.
The recent figures put existing home sales 2.6% higher than at this time last year, and the median sale price increased 4.7% to $278,200.