Existing-home sales posted a second
month of significant sales gains in July, building on a record 20.7 percent
increase in June. The National Association of Realtors® (NAR)
said sales were at a seasonally adjusted 5.86 million units, a 24.7 percent
month-over-month increase from 4.72 million and overturning the June record for
monthly gains. Sales are now higher than the previous year by 8.7 percent. Each
of the four major regions attained double-digit, month-over-month increases,
while the Northeast was the only region to show a year-over-year decline.
The record-setting pace was greater
than what were some outsized predictions. Analysts polled by Econoday had
projected sales to fall in a range of 4.60 to 5.75 million. The consensus was
“The housing market is well past the
recovery phase and is now booming with higher home sales compared to the
pre-pandemic days,” said 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.”
Single-family home sales were at a seasonally
adjusted annual rate of 5.28 million, a 23.9 percent increase from 4.26 million
in June, and up 9.8 percent from one year ago. Existing condominium and co-op
sales jumped 31.8 percent to a rate of 580,000 units, essentially the same sales
pace as in July 2019.
“Luxury homes in the suburbs are
attracting buyers after having lagged the broader market for the past couple of
years,” Yun said. “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.”
The median existing-home price for
all housing types in July was $304,100, an annual appreciation of 8.5 percent
from the July 2019 median of $280,400, as prices rose in every region. It was
the 101st consecutive month of annual gains and the first time ever that the
national median has exceeded $300,000. The median existing single-family home
price was $307,800, an 8.5 percent annual gain and condo prices grew by 6.4
percent to a median of $270,100.
Inventories continued to tighten.
The number of available homes for sale at the end of
July was 1.50 million, compared to 1.90 million a year earlier. That inventory
is estimated at a 3.1-month supply at the current sales pace, down from 3.9
months in June and 4.2 months in July 2019.
Yun said these tight
inventories are having 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 said. “More homes need to be built.”
remained on the market for 22 days in July, seasonally down from 24 days in
June and from 29 days in July 2019. As Yun indicated, 68 percent of homes sold
in during the month were on the market for less than a month.”
First-time buyers were
responsible for 34 percent of sales during the month, a figure that has varied little
since the Great Recession, although it was 3 percentage points higher than last
July, an unusual deviation. Individual
investors or second-home buyers purchased 15 percent of homes sold in July, compared
to 9 percent in June and 11 percent in July 2019. Sixteen percent of sales during
the month were all-cash, unchanged from June but down
from 19 percent the prior July. Less than 1 percent of sales were foreclosures
or short sales.
to secure housing has helped rejuvenate our nation’s economy despite incredibly
difficult circumstances,” said 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.”
For the second consecutive month,
sales for July increased in every region and median home prices grew in each of
the four major regions from one year ago. The Northeast posted the largest monthly
increase in sales, a 30.6 percent surge to an annual rate of 640,000. The region,
however, was the only one that did not surpass the July 2019 pace. There was a
5.9 percent decline. The median price grew 4.0 percent on an annual basis to $317,800.
Sales in the Midwest were up 27.5
percent from June to an annual rate of 1,390,000 units, an annual increase of 10.3
percent. The median price rose by 8.0 percent to $244,500.
There were 19.4 percent and a 12.6
percent increases in sales in the South for the month and year-over-year,
respectively. The median price was $268,500, a 9.9 percent increase from a year ago.
Existing-home sales in
the West increased only fractionally less than those in the Northeast, rising 30.5
percent to a 1,240,000-annual rate. This was 7.8 percent higher year-over-year.
The median price was $453,800, 11.3 percent appreciation.