Both home sales and prices are surging in Massachusetts as a robust summer run in the state’s housing market ended in August with a double-digit increase in the median home price and most homes sold for that month in eight years, according to a report released Tuesday.
Home sales rose by almost 14 percent last month, making it the state’s best August since the housing market peaked in 2005, while the median price of a single-family home climbed nearly 11 percent, to $340,000, from $307,500 a year earlier, according to Warren Group, a Boston firm that tracks local real estate.
Prices haven’t returned to prerecession levels, but they are getting close. At the peak in 2005, the median home price in the first eight months of the year was $355,000, compared with $325,000 for the same period in 2013.
The Warren Group’s CEO, Timothy Warren Jr., expects median prices will return to 2005 levels by next year.
“The market seems to have some steam,” he said. But once prices bounce back to peak levels, he said, “I’d hate to see [prices] increase in the double digits because people aren’t getting double-digit pay increases.”
A closely watched home price index, however, hinted that price appreciation might be slowing.
The S&P/Case-Shiller Home Price Indices, which track repeat sales, found the growth rates in most major metropolitan areas, including Boston, dipped a bit, suggesting the pace may have peaked, said David Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices.
Prices in Boston rose 1.4 percent from June to July, compared with 1.7 percent from May to June, according to Case-Shiller.
Over the last year, prices nationally rose about 12 percent, according to Case-Shiller, which tracks prices in 20 metropolitan areas. Communities such as Las Vegas and Phoenix, which saw dramatic drops in home prices during the housing crash, are seeing sharp increases now.
“The housing market continues to be quite strong,” said Blitzer.
In Massachusetts, two main factors are contributing to booming sales and rising prices, said Sam Schneiderman, president of the Massachusetts Association of Buyer Agents. More buyers are coming into the market, spurred by rising interest rates and hoping to buy homes and lock in still low rates before it’s too late, Schneiderman said.
At the same time, there’s a shortage of homes on the market, sparking bidding wars. Two weeks ago, Schneiderman said, he helped a buyer bid on a Somerville condominium that received 19 offers. His buyer didn’t get the condo.
The Federal Reserve earlier this month said it would continue its $85 billion a month bond-buying program intended to keep long-term borrowing rates low and encourage spending and economic growth. But most economists expect the Fed to eventually cut back on that program and for interest rates to rise.
Still, the housing market should remain strong and will help the overall economy, said Pat Newport, an economist with IHS Global Insight, a Lexington forecasting firm.
“Going forward,” he said, “it’s still going to be a market that is a contributor toward growth.”