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Existing-Home Sales Rise 2.0% in July

According to the National Association of Realtors (NAR), existing-home sales rose in July, marking two consecutive months of increases. Total existing-home sales, defined as completed transactions that include single-family homes, townhomes, condominiums, and co-ops, grew 2.0% month-over-month in July to a seasonally adjusted annual rate of 5.99 million. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).

"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," said Lawrence Yun, NAR's Chief Economist. "Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."

Redfin recently reported that in July, 60.1% of home offers written by Redfin agents faced competition, down from a revised rate of 66.5% in June and a pandemic peak of 74.1% in April. And while July's bidding-war rate was the lowest since January, it was still higher than July 2020's 57.9% bidding-war rate.

Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June's supply, and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.

The median existing-home price for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb, marking 113 straight months of year-over-year gains.

"Although we shouldn't expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve," said Yun. "In the meantime, some prospective buyers who are priced out are raising the demand for rental homes, and thereby pushing up the rental rates.”

Single-family home sales increased to a seasonally adjusted annual rate of 5.28 million in July, up 2.7% from 5.14 million in June and down 0.8% from one year ago. The median existing single-family home price was $367,000 in July, up 18.6% from July 2020.

Time remained a factor as properties typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020. Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.

First-time buyers accounted for 30% of sales in July, down from 31% in June and down from 34% in July 2020. NAR's 2020 Profile of Home Buyers and Sellers–released in late 2020–revealed that the annual share of first-time buyers was 31%.

Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from 14% in June, but even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, even with June and up from 16% in July 2020.

Distressed sales, comprised of foreclosures and short sales, represented less than 1% of sales in July, equal to the percentage seen a month prior and equal to July 2020.

"As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country," said NAR President Charlie Oppler, a Realtor from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby's International Realty. "But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America."

Regionally, existing-home sales in the Northeast remained steady in July, registering an annual rate of 740,000 for the second consecutive month, a 12.1% rise over July 2020. The median price in the Northeast was $411,200, up 23.6% from one year ago.

Existing-home sales in the Midwest rose 3.8% to an annual rate of 1,380,000 in July, a 1.4% decline from a year ago. The median price in the Midwest was $275,300, a 13.1% increase from July 2020.

Existing-home sales in the South rose 1.2% in July, recording an annual rate of 2,630,000, up 1.2% from the same time one year ago. The median price in the South was $305,200, a 14.4% jump from one year ago.

In the West, existing-home sales grew 3.3%, posting an annual rate of 1,240,000 in July, equal to the level of a year ago. The median price in the West was $508,300, up 12.5% from July 2020.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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