NAR: U.S. Home Sales Climb 2% Higher in July
Prices rose 17.8%, and in a positive sign, the for-sale inventory rose 7.3%. Economist Yun says there’s a chance prices “will level off as inventory continues to improve.”
WASHINGTON – U.S. existing-home sales rose in July, marking two consecutive months of increases, according to the National Association of Realtors® (NAR).
Of the four broad regions included in NAR’s analysis, three of four recorded modest month-over-month gains, and the fourth remained level. In a year-to-year comparison, two regions saw gains, one saw a decline and one was unchanged.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – grew 2.0% compared to June for a seasonally adjusted annual rate of 5.99 million in July. Sales also rose in a year-to-year comparison, inching up 1.5% (5.90 million in July 2020).
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” says Lawrence Yun, NAR’s chief economist. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month inventory recorded in June but down from 3.1 months in July 2020.
The median existing-home price for all housing types in July was $359,900, up 17.8% year-to-hear ($305,600). Each of NAR’s four regions showed price increases, and it’s the 113th straight month for year-over-year gains.
“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” Yun says. “In the meantime, some prospective buyers who are priced out are raising the demand for rental homes, and thereby pushing up the rental rates.”
Properties typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020: 89% of July’s homes sold were on the market for less than a month.
Almost one in three (30%) of July buyers were first-timers, a drop month-to-month (31% in June) and year-to-year (34% in July 2020). Individual investors or second-home buyers purchased 15% of homes in July, up from 14% in June but unchanged year-to-year. even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, the same as June but up from 16% in July 2020.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in July, without any apparent change month-to-month or year-to-year.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%.
Single-family and condo/co-op sales: Single-family home sales increased to a seasonally adjusted annual rate of 5.28 million in July, up 2.7% from 5.14 million in June and down 0.8% from one year ago. The median existing single-family home price was $367,000 in July, up 18.6% from July 2020.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 710,000 units in July, down from 730,000 in June and up 22.4% from one year ago. The median existing condo price was $307,100 in July, an annual increase of 14.1%.
“As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country,” says NAR President Charlie Oppler. “But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America.”
Regional breakdown: Existing-home sales in the Northeast remained steady in July, registering an annual rate of 740,000 for the second straight month and a 12.1% rise from July 2020. The median price in the Northeast was $411,200, up 23.6% from a year ago.
Existing-home sales in the Midwest rose 3.8% to an annual rate of 1,380,000 in July, a 1.4% decline from a year ago. The median price in the Midwest was $275,300, a 13.1% increase from July 2020.
Existing-home sales in the South rose 1.2% in July, recording an annual rate of 2,630,000, up 1.2% from the same time a year ago. The median price in the South was $305,200, a 14.4% jump year-to-year.
Existing-home sales in the West grew 3.3%, posting an annual rate of 1,240,000 in July, equal to the West’s level a year ago. The median price in the West was $508,300, up 12.5% from July 2020.
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