According to the latest index from the National Association of Realtors, total existing home sales, which are completed transactions, fell by 1.2 to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2% higher than the 4.41 million unit level in June 2012.
Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates. ‘Affordability conditions remain favourable in most of the country, and we’re still dealing with a large pent up demand. However, higher mortgage interest rates will bite into high cost regions of California, Hawaii and the New York City metro area market,’ he explained.
The data also shows that total housing inventory at the end of June rose 1.9% to 2.19 million existing homes available for sale, which represents a 5.2 month supply at the current sales pace, up from five months in May.
Listed inventory remains 7.6 percent below a year ago, when there was a 6.4 month supply. ‘Inventory conditions will continue to broadly favour sellers and contribute to above-normal price growth,’ Yun remarked.
The national median existing home price for all housing types was $214,200 in June, up 13.5% from June 2012. This marks 16 consecutive months of year on year price increases, which last occurred from February 2005 to May 2006.
Distressed homes sales were 15% of June sales, down from 18% in May and are the lowest share since monthly tracking began in October 2008. This compares with 26% in June 2012. The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the price growth, Yun said.
NAR President Gary Thomas said that some owners who were hurt by the downturn are now in the market. ‘Rising values have improved the position of home owners and 16% of real estate agents surveyed in June report they worked with a client that previously had an underwater mortgage,’ he pointed out.
Of those previously underwater owners, 53% were planning to buy another home and 22% intend to rent and 25%. In addition, 47% of real estate agents report they have potential sellers who are waiting for additional price appreciation before they sell.
The median time on market for all homes was 37 days in June, down from 41 days in May, and is 47% faster than the 70 days on market in June 2012. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non distressed homes took 35 days. Some 47% of all homes sold in June were on the market for less than a month.
First time buyers accounted for 29% of sales in June, compared with 28% in May and 32% in June 2012. ‘First time buyers should be closer to 40% of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the US,’ Yun said.
All cash sales made up 31% of transactions in June, down from 33% in May and higher than the 29% recorded in June 2012. Individual investors, who account for many cash sales, purchased 17% of homes in June, down from 18% in May and 19% in June 2012.
Single family home sales slipped 1.1% to a seasonally adjusted annual rate of 4.5 million in June from 4.55 million in May, but are 14.5% above the 3.93 million unit pace in June 2012. The median existing single family home price was $214,700 in June, which is 13.2% above a year ago.
Existing condominium and co-op sales fell 1.7% to an annualised rate of 580,000 units in June from 590,000 in May, but are 20.8% higher than the 480,000 unit level a year ago. The median existing condo price was $210,200 in June, up 15.4% from June 2012.
Regionally, existing home sales in the Northeast declined 1.65 to an annual rate of 630,000 in June but are 16.7% above June 2012. The median price in the Northeast was $270,400, which is 6.8% above a year ago.
Existing home sales in the Midwest were unchanged in June at a pace of 1.21 million and are 17.5% higher than a year ago. The median price in the Midwest was $170,100, up 8.9% from June 2012.
In the South, existing home sales slipped 1.5% to an annual level of 2.03 million in June but are 16% above June 2012. The median price in the South was $186,300, which is 13.7% above a year ago.
Existing home sales in the West declined 1.6% to a pace of 1.21 million in June but are 11% above a year ago. With ongoing supply constraints, the median price in the West was $282,000, a jump of 19.9% from June 2012.
