Existing-Home Sales Rise 1.3% in July, Stopping Decline
Existing-Home Sales Bounce Back in July
In a significant turn of events, existing-home sales in the U.S. saw an increase of 1.3% in July, reaching a seasonally adjusted annual rate of 3.95 million. This growth halted a declining trend that persisted for four consecutive months since March. However, on a year-over-year basis, sales still declined by 2.5% compared to the previous July.
Median Home Prices on the Rise
The median sales price for existing homes jumped 4.2% from July of the prior year, now standing at $422,600. This marks the 13th consecutive month of year-over-year price growth, indicating a robust demand in the housing market despite the sales slowdown.
Inventory and Supply Dynamics
By the end of July, the inventory of unsold existing homes rose slightly, increasing by 0.8% to reach 1.33 million units. This is equivalent to 4.0 months of supply based on the current sales pace. In comparison, unsold inventory was down from 4.1 months in June, but higher than the 3.3 months seen in July the previous year.
Regional Sales Trends
Sales trends varied across the major U.S. regions. Specifically, three out of the four regions experienced sales growth during July, with the Midwest remaining stable. Year-over-year comparisons indicate a rise in sales in both the Northeast and West regions, while sales declined in the Midwest and South territories. This indicates varying dynamics and demands in different housing markets across the country.
Influence of Mortgage Rates
The Federal Reserve's ongoing influence on interest rates continues to shape consumer behavior in the housing market. As of mid-August, the average rate for a 30-year fixed mortgage rose slightly to 6.49%, up from 6.47% the previous week but down from 7.09% a year ago. These fluctuating interest rates have contributed to improved affordability for some prospective buyers, leading to an uptick in sales.
Insights from Real Estate Experts
NAR Chief Economist Lawrence Yun commented on the current state of the housing market, stating, "Despite the modest gain, home sales are still sluggish. However, consumers are definitely seeing more choices, and affordability is improving due to lower interest rates." This reflects a cautious optimism among economists as they navigate the complexities of the current market landscape.
First-Time Buyers and Market Composition
First-time homebuyers constituted 29% of all transactions in July, matching the previous month but slightly less than the 30% recorded a year prior. Additionally, all-cash purchases made up 27% of total transactions, representing a decrease from 28% in June yet an increase from 26% in July of the prior year. The share of individual investors in the market also saw a decrease, purchasing 13% of homes, down from 16% in both June and the previous July.
The Future of the Housing Market
Looking ahead, the National Association of Realtors continues to monitor the market closely, with insights and data being released regularly to gauge changes in trends. Upcoming reports will provide more granular details on pending home sales and other indicators that reflect the health of the housing market.
Regional Breakdown of Sales Activity
In the Northeast, existing-home sales in July surged by 4.3% from June, totaling an annual rate of 490,000, representing an increase of 2.1% from one year ago. The median price in this region rose to $505,100, a significant gain of 8.3% from the previous year. Meanwhile, existing-home sales in the Midwest remained unchanged at an annual rate of 920,000, yet reflected a decrease of 5.2% from the previous year. The median price in the Midwest reached $321,300, indicating a 4.5% increase.
Frequently Asked Questions
1. What caused the rise in existing-home sales in July?
The rise in existing-home sales can be attributed to improved affordability stemming from lower interest rates, which have allowed consumers more flexibility in the market.
2. How did median home prices change in July?
The median home price increased by 4.2% from the previous year, reaching $422,600, marking continued price gains for the 13th month in a row.
3. What is the current inventory of unsold homes?
The unsold inventory of existing homes stood at 1.33 million units by the end of July, equivalent to a 4.0-month supply based on the current sales pace.
4. Are first-time buyers still participating in the market?
Yes, first-time buyers accounted for 29% of all sales in July, indicating that this segment of the market remains active despite overall sluggish sales.
5. What are experts anticipating for the housing market moving forward?
NAR experts are cautiously optimistic, believing that increasing affordability and consumer options may stimulate more sales, though the market remains complex and evolving.
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