“The housing market is well past the recovery phase and now booming,” says NAR. And current owners seeking larger homes will “drive demand even into 2021.”
National existing-home sales continued a strong, upward trajectory in July, marking two consecutive months of significant sales gains, according to the National Association of Realtors® (NAR). Each of the four major U.S. regions attained double-digit, month-over-month increases, and the Northeast was the only region to show a year-over-year decline.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July – a record high. The previous record monthly increase in sales was 20.7% in June of this year.
But sales increased year-to-year as well as month-to-month, with overall sales volume up 8.7% compared to July 2019 (5.39 million).
“The housing market is well past the recovery phase and now booming with higher home sales compared to the pre-pandemic days,” says Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes, and this will lead to a secondary level of demand even into 2021.”
The median U.S. existing-home price for all housing types in July was $304,100, up 8.5% from July 2019 ($280,400), with prices rising in every region. July’s national price increase marks 101 straight months of year-over-year gains, and – for the first time ever – the national median existing home price rose above the $300,000 level.
Total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). Unsold inventory is at a 3.1-month supply at the current sales pace, down from 3.9 months in June and down from the 4.2-month figure recorded in July 2019. Economists generally consider a 6-month supply of listings to be a balanced market between buyers and sellers, with anything below six months a sellers’ market.
Yun says dire inventory totals have a substantial effect on sales.
“The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” he says. “More homes need to be built.”
Properties typically remained on the market for 22 days in July, seasonally down from 24 days in June and 29 days in July 2019 – 68% of homes sold in July were on the market for less than a month.
First-time buyers were responsible for 34% of sales in July, down from 35% in June and up from 32% in July 2019.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from both 9% in June and 11% in July 2019. All-cash sales accounted for 16% of transactions in July, equal to the percentage in June and down from 19% in July 2019.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in July, down from 3% in June up from 2% in June 2019.
“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” says NAR President Vince Malta. “Admittedly, we have a way to go toward full recovery, but I have faith in our communities, the real estate industry and NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.02% in July, down from 3.16% in June. The average commitment rate across all of 2019 was 3.94%.
Single-family and condo/co-op sales: Single-family home sales were at a seasonally-adjusted annual rate of 5.28 million in July, up 23.9% from 4.26 million in June and 9.8% from one year ago. The median existing single-family home price was $307,800 in July, up 8.5% year-to-year.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 580,000 units in July, up 31.8% from June and equal to a year ago. The median existing condo price was $270,100 in July, an increase of 6.4% from a year ago.
“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun says. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office.”
Regional breakdown: For the second consecutive month, sales for July increased in every region and median home prices grew in each of the four major regions year-to-year.
July existing-home sales in the Northeast rocketed 30.6% higher with an annual rate of 640,000. The median price in the Northeast was $317,800, up 4.0% from July 2019.
Existing-home sales jumped 27.5% in the Midwest to an annual rate of 1,390,000 in July, up 10.3% year-to-year. The median price in the Midwest was $244,500, an 8.0% increase from July 2019.
Existing-home sales in the South shot up 19.4% to an annual rate of 2.59 million in July, a 12.6% increase from the same time one year ago. The median price in the South was $268,500, a 9.9% year-to-year increase.
Existing-home sales in the West ascended 30.5% to an annual rate of 1,240,000 in July, a 7.8% increase from a year ago. The median price in the West was $453,800, up 11.3% year-to-year.
© 2020 Florida Realtors®