U.S. existing-home sales rose 21% in June, the biggest monthly gain on record, according to the National Association of Realtors.
Sales of single-family homes, townhomes, condominiums, and co-ops rose to a seasonally adjusted 4.72 million at an annual pace after three consecutive months of declines, NAR said in a Wednesday report. The median price rose 3.5% to $295,300, with gains in every region of the country.
“Buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
Mortgage rates have tumbled in recent weeks as investors worried about a resurgence in COVID-19 infections pile into the bond market and the Federal Reserve continues buying fixed assets backed by home loans.
The average U.S. rate for a 30-year fixed mortgage fell to record low 2.98% last week, breaking the 3% threshold for the first time, according to Freddie Mac data that goes back to 1971.
The worst public health crisis in more than a century is worsening the inventory shortage that has plagued the housing market since last year, Yun said. Potential sellers are choosing to delay a move to avoid exposing their families to visitors in their homes, even with mitigation efforts such as limiting showings and requirements that potential buyers wear masks and sometimes even booties.
The supply of homes for sale at the end of June totaled 1.57 million, down 18.2% from the year-ago month, Yun said. Measured as a “months supply” number, which gauges how long it would take to sell of existing inventory if nothing else came on the market, unsold inventory stood at 4 months, down from 4.3 months a year ago.
Limited supply has an upside, though. It tends to support home-price growth as buyers compete over properties.
“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply,” Yun said.