Home sales dipped slightly in July despite low mortgage rates according to an analysis by Redfin. The report also indicated a rise in home prices and one of the largest decline of the year in housing inventory during the month.
Home sale prices grew at a steady clip of 3.3%, and the national median price currently stands at $318,100. The Redfin report indicated that the supply of homes for sale fell 3.4% year over year indicating the first decline in a year. Of the 85 metros tracked by Redfin, only 28 saw an increase in the number of homes for sale compared to a year earlier.
The three metro areas with the biggest increases in the number of homes for sale were Oxnard, California (+22.4%); Boston (+18.1%); and Honolulu (+17.4%). The biggest declines in the number of homes for sale were in New Orleans (-28.3%), Rochester, New York (-27.9%), and Tulsa, Oklahoma (-22.5%).
“July home prices and sales were weaker than I had expected, especially given that falling mortgage rates have been luring homebuyers back to the market since early spring,” said Daryl Fairweather, Chief Economist at Redfin.
Home sales were also down 3.4% for the second consecutive month in July, the report found. Additionally, 70 of the 85 metros tracked by Redfin saw a decline in sales during the month. The metros that saw the largest decrease in home sales were Miami (-22.9%); Detroit (-18.9%); and New York (-13.9%).
Despite these declines, Fairweather said that she was optimistic about the housing demand next year.
“Even though we’ve seen increased interest from homebuyers—especially compared to a year ago when mortgage rates were climbing—uncertainties in the overall economy and talk of a looming recession have people feeling jittery about making a huge purchase and investment,” she said. “But I think the odds are that we won’t see a recession within the next year. If rates stay low and the economy continues to grow, we’ll see more homebuyers come back in a serious way in 2020, and the market will be much more competitive.”