WASHINGTON (July 21, 2016) – Boosted by a greater share of sales to first-time buyers not seen in nearly four years, existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month, according to the National Association of Realtors. Only the Northeast saw a decline in closings in June, and sales to investors fell to their lowest overall share since July 2009.
Total existing-home sales, which are completed transactions that include single-family homes, town homes, condominiums and co-ops, climbed 1.1% to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May. After last month’s gain, sales are now up 3.0% from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).
Single-family home sales increased 0.8% to a seasonally adjusted annual rate of 4.92 million in June from 4.88 million in May, and are now 3.1% higher than the 4.77 million pace a year ago. The median existing single-family home price was $249,800 in June, up 5.0% from June 2015.
Existing condominium and co-op sales grew 3.2% to a seasonally adjusted annual rate of 650,000 units in June from 630,000 in May, and are now 1.6% above June 2015 (640,000 units). The median existing condo price was $231,600 in June, which is 3.2% above a year ago.
June existing-home sales in the Northeast declined 1.3% to an annual rate of 760,000, but are still 5.6% above a year ago. The median price in the Northeast was $284,800, which is 1.4% above June 2015.
In the Midwest, existing-home sales jumped 3.8% to an annual rate of 1.35 million in June, and are now 4.7% above June 2015. The median price in the Midwest was $199,900, up 5.7% from a year ago.
Existing-home sales in the South in June remained unchanged from May at an annual rate of 2.26 million, and are 3.2% above June 2015. The median price in the South was $217,400, up 5.5% from a year ago.
Existing-home sales in the West rose 1.7% to an annual rate of 1.20 million in June, but are still 0.8% below a year ago. The median price in the West was $350,800, which is 7.2% above June 2015.
Lawrence Yun, NAR chief economist, said the impressive four month streak of sales gains through June caps off a solid first half of 2016 for the housing market. “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,” he said. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.”
He added, “Looking ahead, it’s unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing.”
The median existing-home price for all housing types in June was $247,700, up 4.8% from June 2015 ($236,300). June’s price increase marks the 52nd consecutive month of year-over-year gains and surpasses May’s peak median sales price of $238,900.
Total housing inventory at the end of June dipped 0.9% to 2.12 million existing homes available for sale, and is now 5.8% lower than a year ago (2.25 million). Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in May.
The share of first-time buyers was 33% in June, which is up from 30% in May and a year ago and is the highest since July 2012 (34%). Through the first six months of the year, first-time buyers have represented an average of 31% of buyers; they were 30% in all of 2015.
“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,” added Yun. “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.”
All-cash sales were 22% of transactions in June, unchanged from both May and a year ago. Individual investors, who account for many cash sales, purchased 11% of homes in June (lowest since July 2009 at 9%), down from 13% in May and 12% a year ago. 64% of investors paid cash in June.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased from 3.60% in May to 3.57% in June. Mortgage rates have now fallen four straight months and in June were the lowest since May 2013 (3.54%). The average commitment rate for all of 2015 was 3.85%.
Properties typically stayed on the market for 34 days in June, an increase from 32 days in May but unchanged from a year ago. Short sales were on the market the longest at a median of 156 days in June, while foreclosures sold in 49 days and non-distressed homes took 30 days. 48% of homes sold in June were on the market for less than a month.
Inventory data from Realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Wilson, N.C., and Jacksonville, N.C., both at a median of 22 days; San Jose-Sunnyvale-Santa Clara, Calif., 28 days; and San Francisco-Oakland-Hayward, Calif., Seattle-Tacoma-Bellevue, and Denver-Aurora-Lakewood, Colo., at 29 days.
Distressed sales – foreclosures and short sales – were 6% of sales in June, unchanged from May and down from 8% a year ago. Four percent of June sales were foreclosures (lowest since NAR began tracking in October 2008) and 2% were short sales. Foreclosures sold for an average discount of 11% below market value in June (12% in May), while short sales were discounted 18% (11% in May).