Existing-home sales continue to grow—increasing 24.7 percent in July
Total existing-home sales climbed 24.7 percent to a seasonally adjusted annual rate of 5.86 million in July, with year-over-year sales up 8.7 percent.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” explains Lawrence Yun, National Association of Realtors® (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.”
Median existing-home prices rose in every region—up 8.5 percent from last year—marking 101 straight months of year-over-year gains. The national median home price surpassed the $300,000 level for the first time ever at $304,100.
Low inventory driving market competition
July’s total housing inventory amounted to 1.50 million units, down 2.6 percent from June and 21.1 percent from last year. At the current sales pace, unsold inventory is at a 3.1-month supply, down from 3.9 months in June and 4.2 months from last year.
Yun weighs in on the shrinking inventory, continuing his recurring call for construction. “The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” he said. “More homes need to be built.”
Just last week, NAR released its latest data for metro home prices, which found that median single-family home prices increased 96 percent in 2020’s second quarter in comparison to last year.
In July, properties typically remained on the market for 22 days, down from 24 days in June and 29 days in July of 2019, with 68 percent of homes sold on the market for less than a month.
Positive predictions for economic recovery
“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 in NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”
According to Realtor.com®’s Market Hotness Index, the market areas with particularly high listing views per property include the following cities:
- Topeka, Kan.
- Rochester, N.Y.
- Burlington, N.C.
- Columbus, Ohio
- Reading, Pa.
Freddie Mac reports the average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 3.02 percent in July, down from 3.16 in June. For context, the average commitment rate for all of 2019 was 3.94 percent.
A shift in buyer preferences
July’s single-family home sales:
- Seasonally adjusted annual rate: 5.28 million—up 23.9% from June and 9.8% from last year.
- Median existing price: $307,800—up 8.5% from last year.
July’s condominium and co-op sales:
- Seasonally adjusted annual rate: 580,000—up 31.8% from June; equal to last year.
- Median existing price: $270,100—up 6.4% from last year.
“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun explains. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a large home, including an extra room for a home office.”
Double digit month-over-month increases in all four regions
While each of the four major regions saw double-digit growth from June to July, the Northeast was the only region to show a year-over-year decline.
July existing-home sales:
- Northeast: Up 30.6% to an annual rate of 640,000—5.9 % lower than last year.
- Midwest: Up 27.5% to an annual rate of 1,390,000—10.3% higher than last year.
- South: Up 19.4% to an annual rate of 2.59 million—12.6% higher than last year.
- West: Up 30.5% to an annual rate of 1,240,000—7.8% higher than last year.