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Existing Home Sales See First Year-Over-Year Gain in a Year, Boosted by Lower Mortgage Rates

After a minor decline in June, existing home sales, released by the National Association of Realtors (NAR), rebounded in July.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, climbed 2.5% to a seasonally adjusted annual rate of 5.42 million in July. On a year-over-year basis, sales were 0.6% up than a year ago, the first year-over-year gain in seventeen months.

The first-time buyer share fell to 32% in July from 35% last month but remained unchanged from a year ago. The July inventory decreased to 1.89 million units from 1.92 million units both in June and a year ago. At the current sales rate, the July unsold inventory represents a 4.2-month supply, down from a 4.4-month supply last month and 4.3-month a year ago.Homes stayed on the market for an average of 29 days in July, up from 27 days both last month and a year ago. In July, 51% of homes sold were on the market for less than a month.

The July all-cash sales shared 19% of transactions, up from 16% last month and 20% a year ago.

The July median sales price of all existing homes was $280,800, up 4.3% from a year ago, representing the 89th consecutive month of year-over-year increases. The median existing condominium/co-op price of $254,300 in June was up 2.5% from a year ago.

Regionally, all regions saw an increase in existing home sales in July except for the Northeast, compared to the previous month. On a year-over-year basis, sales in the Northeast and West declined 4.3% and 0.8%, while sales in the Midwest and South grew 0.8% and 2.7%.

Falling mortgage rates should expand affordability and attract more buyers. However, tight inventory, especially of affordable homes, remains a headwind for homebuyers, as it leads to home price appreciation. NAR suggests more inventory is needed. Meanwhile, builder confidence rose one point to 66 in August, but builders continued to struggle with rising construction costs and labor shortages which are hurting affordability and depressing supply.

This post brought to you by NAHB Eye on Housing.


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