NAR: June Existing-Home Sales Rose 1.4%
Year-to-year home prices rose 23.4%, the second-highest on record. However, a 3.3% inventory uptick may start to slow price increases and give homebuyers more hope.
WASHINGTON – National existing-home sales increased in June, ending four consecutive months of declines, according to the National Association of Realtors® (NAR). Three of the four major U.S. regions registered small month-over-month gains, while the fourth remained flat. However, all four areas notched double-digit year-over-year gains.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – grew 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020).
“Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales,” says Lawrence Yun, NAR’s chief economist. “Home sales continue to run at a pace above the rate seen before the pandemic.”
Total housing inventory at the end of June amounted to 1.25 million units, up 3.3% from May’s inventory and down 18.8% from one year ago (1.54 million). Unsold inventory now sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 2020.
The median existing-home price for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), and every region in NAR’s study recorded price jumps. It’s now 112 straight months of year-over-year gains.
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun says. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
Properties typically remained on the market for 17 days in June, unchanged from May and down from 24 days in June 2020. Nine out of 10 (89%) homes sold in June 2021 were on the market for less than a month.
First-time buyers accounted for 31% of sales in June, also even with May but down from 35% in June 2020.
Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in June, down from 17% in May and up from 9% in June 2020. All-cash sales accounted for 23% of transactions in June, even with May and up from 16% in June 2020.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in June, equal to May’s percentage but down from 3% in June 2020. However, a government-imposed moratorium on foreclosures currently ends on July 31, which could impact distressed numbers later this year.
“Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun says. “Although (mortgage) rates are favorably low, these hurdles have been overwhelming to some potential buyers.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.98% in June, slightly up from 2.96% in May. The average commitment rate across all of 2020 was 3.11%.
Single-family and condo/co-op sales: Single-family home sales decreased to a seasonally adjusted annual rate of 5.14 million in June, up 1.4% from 5.07 million in May and up 19.3% from one year ago. The median existing single-family home price was $370,600 in June, up 24.4% from June 2020.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 720,000 units in June, up from 710,000 in May and up 56.5% from one year ago. The median existing condo price was $311,600 in June, an annual increase of 19.1%.
“NAR continues our conversations with policymakers and leaders from across the industry in an effort to boost housing inventory and increase access to safe, affordable housing for all Americans,” says NAR President Charlie Oppler. “As the nation’s economy continues to recover from COVID-19, securing policies that are in the best interest of U.S. consumers and homeowners remains NAR’s priority.”
Regional breakdown: Existing-home sales in the Northeast increased 2.8% in June, an annual rate of 740,000, a 45.1% rise from a year ago. The median price in the Northeast was $412,800, up 23.6% from June 2020.
Existing-home sales in the Midwest rose 3.1% to an annual rate of 1,330,000 in June, an 18.8% increase from a year ago. The median price in the Midwest was $278,700, an 18.5% increase year-to-year.
Existing-home sales in the South were unchanged from May, posting an annual rate of 2,590,000 in June, up 19.4% from the same time one year ago. The median price in the South was $311,600, a 21.4% climb from one year ago.
Existing-home sales in the West rose 1.7%, at an annual rate of 1,200,000 in June, a 23.7% jump from a year ago. The median price in the West was $507,000, up 17.6% from June 2020.
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