July Sales of Existing Homes Beat Estimates Even as Prices Rise

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The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in July rose 2.5% to 5.42 million from a total of 5.27 million in June. Sales are up by 0.6% compared to July 2018 sales of 5.39 million.

July sales exceeded the consensus estimate for monthly sales of 5.385 million, according to a survey of economists polled by Bloomberg.

The NAR noted that home-price appreciation has been “much stronger” in lower-priced homes compared to homes in the higher price range. The same homes sold in 2012 and again in 2018 in the Atlanta-Sandy Springs-Roswell, Georgia, metro area, for example, saw prices rise by 165%.

The NAR’s chief economist, Lawrence Yun, said:

Falling mortgage rates are improving housing affordability and nudging buyers into the market. The shortage of lower-priced homes has markedly pushed up home prices. Clearly, the inventory of moderately-priced homes is inadequate and more home building is needed.

Existing home sales closed 2018 with a seasonally adjusted December total of 4.99 million. The seasonally adjusted number for December 2017 was 5.56 million.

Housing inventory decreased slightly in July to 1.89 million homes (from 1.92 million in June), equal to a supply of 4.2 months, down by 0.2 months compared with June. Inventory is also down from 4.3 months year over year in July.

According to the NAR, the national median existing home price for all housing types in June was $280,800, down from $285,700 in June but up 4.3% compared with July 2018, and the 89th consecutive month of rising home prices. In January the national median price was $247,500.

The percentage of first-time buyers dropped from 35% in June to 32% in July. First-time buyers accounted for 32% of sales in July 2018. For all of 2018, first-time buyers accounted for 33% of sales.

Sales of single-family homes rose from a seasonally adjusted annual rate of 4.71 million in June to 4.84 million in July and were up 1% compared with July 2018 sales. Sales of multifamily homes fell 3.3% year over year to a seasonally adjusted annual rate of 580,000 units.

All homes were on the market for an average of 29 days in July, two more days month over month and year over year. Distressed sales, foreclosures and short sales accounted for 2% of all July sales, unchanged compared with the prior month and down from 3% in July of last year.

The NAR also reported the following regional data:

July existing home sales in the Northeast decreased by 2.9% to an annual rate of 660,000 and were down 4.3% compared with July 2018 sales. The median price in the Northeast was $305,800, down 1% compared with the same month last year.

In the Midwest, existing home sales rose 1.6% in July to an annual rate of 1.27 million and were up 0.8% compared with the July 2018 rate. The median price in the Midwest was $226,300, up 8.1% from a year ago.

Existing home sales in the South increased by 1.8% in July to an annual rate of 2.31 million and were up 2.7% compared with July 2018 sales. The median price in the South was $245,100, up 5.1% from a year ago.

Existing home sales in the West jumped 8.3% to an annual rate of 1.18 million in July and were down just 0.8% compared with July 2018 totals. The median price in the West was $408,000, up 3.7% compared with the June 2018 median.

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