The arrow is pointing up when it comes to potential existing homes sales, which spiked to a 5.92 million seasonally adjusted annual rate (SAAR), according to Firstam.com. It was an increase of 5.6% month-over-month, a 70.8% hike from the market potential low point in February 1993.
Compared to a year ago, there was a 9.7% rally in the market potential for existing home sales—an uptick of nearly 525,580 (SAAR) sales. At 875,000 million (SAAR) or 12.9%, potential existing-home sales trail the pre-recession peak of market potential of April 2006.
Meantime, in a relatively tepid performance, the market for existing-home sales fell short of its potential by 4.8%--approximately 282,430 (SAAR) sales.
Heading the other way, between July and August, there was an estimated jump of 271,060 (SAAR) sales in the market performance gap.
“Since hitting a low point during the initial stages of the pandemic, the only major industry to display immunity to the economic impacts of the coronavirus is the housing market. Housing has experienced a strong V-shaped recovery and is now exceeding pre-pandemic levels,” said Mark Fleming, Chief Economist at First American. “This is largely because the economic distress from the pandemic has created a services-driven recession, disproportionally hurting younger, lower wage renters that are less likely to be homeowners or home buyers."
Thanks to the bifurcated economic landscape, prospective home buyers who are still employed to channel increased savings towards buying a home, and to take advantage of record low mortgage rates. “In August, these tailwinds propelled housing market potential to its highest level since 2007, driven by a 5.6 percent month-over-month jump in the market potential for existing-home sales, according to our Potential Home Sales Model.” Weekly purchase applications have surpassed their levels from one year ago for 17 straight weeks, due to a delayed spring season and the heightened demand from low rates, he continued.
This summer existing-home sales maintained their accelerated pace. NAR’s data specifically reveals that during the month of July, existing-home sales steadily rose, continuing the trend of significant sales increases that has been going strong for two months straight, according to a report released by the National Association of Realtors (NAR).
Across the entire nation, within all four major regions, sales increased in the double-digits (month-over-month). In fact, the only region that experienced a decline of any sorts was that of the Northeast, which reported a year-over-year decline.
Further highlighted in the report was the exact percentage that total existing-home sales jumped in July from just one month previous, which was just under 25% (to a seasonally-adjusted annual rate of 5.86 million). This marked a record high, beating out the previous highest percentage monthly increase record, which was 20.7% during June of this year. These statistics for July reveal that sales as a whole rose year-over-year (up 8.7% from exactly one year ago).
NAR's chief economist, Lawrence Yun, commented on the current state of affairs in the housing industry, and what to expect moving forward.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days. 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.”