Existing-home sales rose 2.5% in July from the prior month, according to the National Association of Realtors.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – increased to a seasonally adjusted annualized rate of 5.42 million, a gain of 0.6% above July 2018’s rate.
The median price for an existing-home price was $280,800, a gain of 4.3% from last July’s rate of $269,300. This marks the 89th straight month of year-over-year gains.
NAR Chief Economist Lawrence Yun said falling mortgage rates are improving housing affordability and nudging buyers into the market.
However, Yun warns that the supply of affordable housing is severely low, and the shortage of lower-priced homes have pushed up home prices.
“Clearly, the inventory of moderately-priced homes is inadequate, and more home building is needed,” Yun said. “Some new apartments could be converted into condominiums thereby helping with the supply, especially in light of new federal rules permitting a wider use of Federal Housing Administration mortgages to buy condo properties.”
Total homes available for sale decreased from June, falling from 1.92 million existing homes on the market to 1.89 million in July. This level is down 1.6% from last year’s rate.
There was a 4.2-month supply of unsold inventory at the current sales pace, down from 4.4 in June and 4.3 a year ago.
Properties stayed on the market an average of 29 days in July, rising from 27 days in June and July 2018. The report states that 51% of homes stayed on the market for less than a month.
The report shows that the average commitment rate for a 30-year, conventional, fixed-rate mortgage retreated from 3.8% in June to 3.77% in July and the average commitment rate for all of 2018 was 4.54%, according to Freddie Mac.
“Mortgage rates are important to consumers, but so is confidence about the nation’s overall economic outlook,” Yun said. “Homebuying is a serious long-term decision and current low or even lower future mortgage rates may not in themselves meaningfully boost sales unless accompanied by improved consumer confidence.”
According to the report, first-time buyers comprised 32% of sales in July, down from June’s rate of 35% but almost equal to July 2018’s rate of 32%. NAR revealed that the annual share of first-time buyers held steady at 33%.
Single-family home sales increased from a seasonally adjusted annual rate of 4.71 million in June to 4.71 million in July, which is 1% above a year ago. The median existing single-family home price was $284,000 in July, increasing 4.5% from July 2018.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 580,000 units in July, about equal to June, but still down 3.3% from a year ago. The median existing condo price was $254,300 in July, increasing 2.5% from 2018.
Existing-home sales in the Northeast fell 2.9% from the prior month’s rate to an annual rate of 660,000, which is a 4.3% annual decline. The median price in the Northeast decreased 1% from July 2018 and came in at $305,800.
In the Midwest, existing-home sales gained 1.6% from the prior month at an annual rate of 1.27million, which is a 0.8% increase from July 2018’s level. The median price in the Midwest was $226,300, increasing 8.1% from a year ago.
Southern existing-home sales rise 1.8% to an annual rate of 2.31 million in July. This is up 2.7% from last year. The median price in the South rose to $245,100, increasing 5.2% from July 2018.
Existing-home sales in the West spiked 8.3% to an annual rate of 1.18 million in July, which is a 0.8% below July 2018. The median price in the West was $408,000,