Existing home sales--including single-family homes, town homes, condominiums and co-ops-- climbed to a seasonally adjusted annual rate of 5.57 million in June, up 1.1% from a downwardly revised 5.51 million in May, according to a National Association of Realtors release Thursday morning. This is the fourth straight month that existing home sales have risen since the beginning of this year.
"Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances," said Laurence Yun, NAR chief economist, in a statement. "Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases."
Sales of existing single-family homes picked up a moderate 0.8% from May to June to a seasonally adjusted rate of 4.92 million, still strong 5.6% growth year-over-year. This is also the fourth straight month that single-family resales are up after being slowed by a huge deficit of housing inventory in February. The robust resale market mirrors the positive outlook economists see on residential construction as BUILDER recently reported.
The share of first-time buyers rose to 33% in June, the highest in nearly four years since July 2012. Through the first six months of the year, first-time buyers have represented an average of 31% of buyers, suggesting more people are pulling the trigger while mortgage rates are still low.
"The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market," Yun commented. "The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply — particularly areas in the Midwest and parts of the South."
The slow yet steady rebound in single-family sales is largely driven by gains in the Midwest and West, where sales picked up month-over-month by 4.1%, and 2.0%, respectively. The Northeast and South, on the contrary, saw sales of single-family homes drop by -3.0% and -0.5%, respectively, from the previous month. By sales volume, the South remains the biggest pre-owned single-family market, ending this month with a seasonally adjusted annual rate of 1,970,000.
Inflated home prices resulting from restrained inventories are hampering potential buyers. The median price for a pre-owned single-family home increased 5% year-over-year to $249,800 in this month. The West remains the most expensive region to buy a single-family resale ($354,100), followed by the Northeast ($286,400), South ($223,100), and Midwest ($201,500).
The following is a breakdown of percent change of sales by price range in the existing single-family market. Most homes saw notable gains across all regions in this month, with those middle-to-higher tiers of homes above $250,000 reporting the noticeable result. Sales of lower-tier homes priced below $100,000 still had a hard time in the West, Midwest and South.
Total housing inventory at the end of June dipped 0.9% to 2.12 million existing homes available for sale, and is 5.8% lower than the 2.25 million a year ago. Unsold inventory is at a 4.6-month supply at the current sales pace, slightly down from the 4.7-month supply in May.
Read the full release from NAR >>