Total existing home sales, which are completed transactions that include single family homes, town homes, condominiums and co-ops, increased 6.5% to a seasonally adjusted annual rate of 5.39 million in July from a downwardly revised 5.06 million in June.
It means that sales are 17.2% above the 4.6 million unit pace in July 2012 and sales have remained above year ago levels for the last 25 months.
Lawrence Yun, NAR chief economist, said changes in affordability are impacting the market such as mortgage interest rates are being at their highest level in two years and this is pushing some buyers off the sidelines.
‘The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers,’ he pointed out but added that despite higher mortgage interest rates compensating factors that can sustain a continued recovery.
‘Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall,’ he explained.
The national median existing home price for all housing types was $213,500 in July, which is 13.7% above July 2012. This marks 17 consecutive months of year on year price increases, which last occurred from January 2005 to May 2006.
The median price has risen at double digit rates for the past eight months, and is now 7.3% below the all time record of $230,400 in July 2006. Two years ago, the median price was 25.7% below the peak.
Distressed homes, that includes foreclosures and short sales, accounted for 15% of July sales, the same as in June and matching the lowest share since monthly tracking began in October 2008. They were 24% in July 2012. Continuing declines in the share of distressed sales account for some of the price gain.
Some 9% of July sales were foreclosures, and 6% were short sales. Foreclosures sold for an average discount of 16% below market value in July, while short sales were discounted 12%.
The median time on market for all homes was 42 days in July, up from 37 days in June, but is 39% faster than the 69 days on market in July 2012. Short sales were on the market for a median of 72 days, while foreclosures typically sold in 50 days and non-distressed homes took 40 days. Some 45% of homes sold in July were on the market for less than a month.
First time buyers accounted for 29% of purchases in July, unchanged from June, but are down from 34% in July 2012 while all cash sales made up 31% of transactions in July, the same as in June and up from 27% in July 2012.
NAR president Gary Thomas said that more repeat buyers are using cash. ‘The overall percentage of cash purchases has been fairly steady, as has the share of first time buyers, but the investor share has been trending down since February. This means more repeat buyers are using cash in this tight-credit environment. With a steady decline in lower priced inventory, particularly in foreclosures, investors are finding fewer bargains to buy,’ he explained.
Single family home sales rose 6.3% to a seasonally adjusted annual rate of 4.76 million in July from 4.48 million in June, and are 16.4% higher than the 4.09 million unit level in July 2012. The median existing single family home price was $214,000 in July, up 13.5% from a year ago.
Existing condominium and co-op sales increased 8.6% to an annual rate of 630,000 units in July from 580,000 in June, and are 23.5% above the 510,000 unit pace a year ago. The median existing condo price was $209,600 in July, which is 15.5% higher than July 2012.
Regionally, existing home sales in the Northeast surged 12.7% to an annual rate of 710,000 in July and are 20.3% above July 2012. The median price in the Northeast was $271,200, up 6.7% from a year ago.
Existing home sales in the Midwest rose 5.8% in July to a pace of 1.28 million, and are 20.8% higher than a year ago. The median price in the Midwest was $168,300, which is 9.5% above July 2012.