Home >> Daily Dose >> Existing-Home Sales Hit 2014 High
Print This Post Print This Post

Existing-Home Sales Hit 2014 High

for-saleA continued slowdown in home price increases and ongoing improvements in inventory helped boost existing-home sales in July to their highest pace year-to-date.

The National Association of Realtors (NAR) reported on Thursday that sales of existing homes (including single-family houses, townhomes, condominiums, and co-ops) hit a seasonally adjusted annual pace of 5.15 million last month, up 2.4 percent from a downwardly revised June. The median price among existing homes sold was $222,900, a 4.9 percent yearly gain.

Even with the most recent increase—the fourth in as many months—sales activity remains down 4.3 percent from last year's July rate of 5.38 million units, which was the peak of 2013.

Looking only at single-family homes, July sales improved 2.7 percent month-over-month to a seasonally adjusted pace of 4.45 million but still fell 4.2 percent short of last year. The median existing single-family home price was $223,900.

Though sales still look weak compared to 2013, NAR Chief Economist Lawrence Yun said other indicators point to a pickup in momentum.

"The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market," Yun said. "More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise."

Adding to the good news is a drop in distressed home sales, which accounted for 9 percent in July. It was the first time distressed sales share fell into the single digits since NAR began tracking in 2008.

"To put it in perspective, distressed sales represented an average of 36 percent of sales during all of 2009. Fast-forward to today and rising home values are helping owners recover equity and strong job creation [is] assisting those who may have fallen behind on their mortgage due to unemployment or underemployment," Yun said.

First-time homebuyers made up 29 percent of July sales, an improvement over June but still a significant shortfall from the 40 percent NAR says is the historical norm for the market. First-time buyers—young adults, for the most part—remain challenged by debt problems, limited job prospects, and tight credit.

While recently announced changes to FICO's credit model aren't expected to produce any real change in mortgage loan approval rates, the anticipated boost in borrower credit scores could make a difference in down payments and interest rates, which NAR hopes will have an impact on homeownership.

"NAR supports efforts to broaden access to credit for qualified homebuyers, especially those who have been shut out of the housing market or forced to pay higher interest rates because of flawed credit scores," said Steve Brown, president of the association. "A solid credit score is necessary to keep borrowing costs down."

At the regional level, increases were led by the South, which posted a 3.4 percent monthly improvement to a rate of 2.12 million in July. The region was also the only one to see sales rise annually, reporting a 0.5 percent bump.

In the West, existing-home sales climbed 2.6 percent month-over-month to an annual level of 1.17 million, while sales in the Midwest were up 1.7 percent to 1.22 million. Sales in the Northeast were flat at a rate of 640,000.

About Author: Tory Barringer

Tory Barringer began his journalism career in early 2011, working as a writer for the University of Texas at Arlington's student newspaper before joining the DS News team in 2012. In addition to contributing to DSNews.com, he is also the online editor for DS News' sister publication, MReport, which focuses on mortgage banking news.
x

Check Also

Survey: Homeownership Remains Elusive for Baby Boomer Renters

A recent look into housing affordability by NeighborWorks America has found that three in five long-term baby boomer renters feel homeownership remains unattainable.