Existing Home Sales are Booming
MORTGAGE NEWS DAILY
JANN SWANSON
Aug 21 2020, 10:54AM
Existing-home sales posted a second month of significant sales gains in July, building on a record 20.7 percent increase in June. The National Association of Realtors® (NAR) said sales were at a seasonally adjusted 5.86 million units, a 24.7 percent month-over-month increase from 4.72 million and overturning the June record for monthly gains. Sales are now higher than the previous year by 8.7 percent. Each of the four major regions attained double-digit, month-over-month increases, while the Northeast was the only region to show a year-over-year decline.
The record-setting pace was greater than what were some outsized predictions. Analysts polled by Econoday had projected sales to fall in a range of 4.60 to 5.75 million. The consensus was 5.4 million.
"The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days," said Lawrence Yun, NAR's chief economist. "With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021."
Single-family home sales were at a seasonally adjusted annual rate of 5.28 million, a 23.9 percent increase from 4.26 million in June, and up 9.8 percent from one year ago. Existing condominium and co-op sales jumped 31.8 percent to a rate of 580,000 units, essentially the same sales pace as in July 2019.
"Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years," Yun said. "Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office."
The median existing-home price for all housing types in July was $304,100, an annual appreciation of 8.5 percent from the July 2019 median of $280,400, as prices rose in every region. It was the 101st consecutive month of annual gains and the first time ever that the national median has exceeded $300,000. The median existing single-family home price was $307,800, an 8.5 percent annual gain and condo prices grew by 6.4 percent to a median of $270,100.
Inventories continued to tighten. The number of available homes for sale at the end of July was 1.50 million, compared to 1.90 million a year earlier. That inventory is estimated at a 3.1-month supply at the current sales pace, down from 3.9 months in June and 4.2 months in July 2019
