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Talking Points: Existing-Home Sales Rise in June as Home Prices Surpass July 2006 Peak

Existing-home sales increased (3.2%) in June to their highest pace (5.49 million) in over eight years (5.79 million in February 2007). 

Sales have now increased year-over-year for nine consecutive months and are 9.6% above a year ago (5.01 million).  

  • June: 5.49 million (May: 5.32 million)
  • Northeast: 4.3% Mid-West: 4.7% South: 2.3%; West: 2.5% (all have also increased year-over-year for six consecutive months)
  • Single Family: 2.8% Condominium: 6.6%

Backed by June’s solid gain in closings, this year’s spring buying season has been the strongest since the downturn. 

  • 1st-time buyers were 30% in June, down from 32% in May; 28% in June 2014 
  • All-cash sales were 22% of sales in June, down from 24% in May; 32% in June 2014
  • Investors were 12% in June, down from 14% in May; 16% in June 2014 
  • 30-year fixed-rate rose to 3.98% in June (3.84% in May)

Demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy. June sales were also likely propelled by the spring’s initial phase of rising mortgage rates.

However, the cumulative effect of rising demand and limited supply has pushed the national median sales price to an all-time high (July 2006, $230,400). Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers.

Home Prices
The median existing-home price in June was $236,400, which is 6.5% above June 2014. This marks the 40th consecutive month of year-over-year gains.

Inventory/Time on Market
Total housing inventory at the end of June inched 0.9% to 2.30 million existing homes available for sale, and is 0.4% higher than a year ago (2.29 million). Unsold inventory is at a 5.0-month supply at the current sales pace, down from 5.1 months in May. 

  • 5.0-month supply; 5.1 months in May
  • Properties typically stayed on the market for 34 days in June, down from May (40 days) and the shortest time since NAR began tracking in May 2011.
  • Forty-seven percent of homes sold in June were on the market for less than a month – the highest percentage since June 2013 (also 47%).

 

Source: National Association of REALTORS®

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Guest Tuesday, 20 November 2018