Home sales and home prices rise againby Marcie Geffner
U.S. home sales posted another big month in July, with markets nationally on pace to close nearly 5.4 million transactions this year, according to the National Association of Realtors (NAR). The group reported Wednesday that existing-home sales rose strongly and the national median price again recorded a double-digit year-over-year increase.
Home sales, prices up in July
Sales of existing detached houses, townhomes, condominiums and co-ops increased 6.5 percent in July to a seasonally adjusted annualized rate of 5.39 million compared with 5.06 million in June. The recent pace of sales was 17 percent faster than the 4.60 million-unit pace set in July 2012. Sales have now remained higher than year-ago levels for 25 months, NAR said.
The national median price for existing homes of all types sold in July was $213,500, a 13.7 percent rise compared with July 2012. The recent month was the 17th consecutive month of year-over-year price increases.
The national median price has risen at double-digit rates for the last eight months and is now just 7.3 percent lower than the all-time record of $230,400 set in July 2006, NAR said.
Fewer distressed sales
Part of the price rise was attributable to softer sales of distressed properties. Short sales and sales of bank foreclosures accounted for just 15 percent of transactions in July, matching the lowest share since NAR began monthly tracking of these sales in October 2008. In July 2012, these transactions accounted for 24 percent of sales.
The median time on market for all homes sold in July was 42 days, slower than the 37 days posted in June, but much faster than the 69 days recorded in July 2012. Forty-five percent of homes sold last month were on the market for less than one month.
First-time buyers accounted for 29 percent of purchases in July, unchanged from June.
All-cash sales comprised 31 percent of transactions in July, the same as in June.
How mortgage rates impact home buyers
In a statement, NAR Chief Economist Lawrence Yun said the highest mortgage rates in two years pushed some buyers off the sidelines into home purchases. That effect might be short-lived, however, if mortgage rates increase further, shrinking the number of buyers who could purchase a home. Compensating factors, such as job creation and normalized mortgage credit standards, could help to sustain the recovery, Yun said.
Five months’ supply
The supply of for-sale homes rose 5.6 percent to 2.28 million at the end of July. That supply would last 5.1 months at the then-current sales pace, unchanged from June. Constrained supplies should mean higher-than-normal price appreciation for sellers, Yun said.