Home buyers snapped up more existing homes in June, according to the National Association of Realtors (NAR), which said that existing-home sales increased 3.6% last month compared to May.
“Despite some of the challenges, the housing market continues to demonstrate signs of recovery,” said Charles McMillan, NAR’s president.
The June sales figures translates into a seasonally adjusted level of 4.89 million homes, which is slightly lower (down 0.2%) than June 2008’s sales pace. The inventory of existing homes for sale also slid slightly, falling 0.7% to 3.82 million houses. (Many public builder analysts believe that the large volume of existing homes for sale represents a significant obstacle to a new-home market rebound.)
Distressed sales contributed to nearly one-third (31%) of June’s existing home sales, which is pushing prices down. According to NAR data, the national median existing-home price fell 15.4% on an annual basis to $181,800.
The combination of such pricing and the $8,000 federal tax credit are pushing many first-time buyers to pursue homeownership, with first-time purchasers representing 29% of transactions in June.
Of course, many sales are encountering challenges due to the new appraisal rules. More than one-third (37%) of NAR members say they’ve lost at least one sale due to changes in the appraisal code, which is also causing trouble for new-home builders.
Alison Rice is senior editor, online, at BUILDER magazine.