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Home sales increased for the second consecutive month in July.
Existing home sales rose 2% to 5.99 million seasonally adjusted units in July, from the previous month, according to the National Association of Realtors (NAR). The total number of units sold in June was also revised to 5.78 million. The results exceeded analysts’ expectations of a drop of 0.5% and 5.83 million units, according to Bloomberg consensus estimates.
“The housing market has seen a big swing during the COVID lockdown. Once the economy reopens, the sector now appears to be settling, ”Lawrence Yun, chief economist of the NAR, said at a press conference announcing the new data.
Before the pandemic, home sales were around 5.5 million, he said. And sales activity surged for about six months during the pandemic to reach around 6.5 million units sold. Now sales are less than around 6 million units.
The results may be another sign that homebuilder confidence fell to a 13-month low in July, hitting a reading of 75, against expectations of an unchanged index at 80, according to the.
Meanwhile, the median price of existing homes for all housing types in July was $ 359,900, up 17.8% from July 2020, as every region in the United States saw prices climb. That marks 113 consecutive months of year-over-year gains, but marks a slowdown in price growth of 20-29% from a year ago, according to Yun. Median price growth was boosted by an increase in home sales of over $ 500,000.
“Low-end home sales don’t click as much as high-end sales,” he said. Sales of homes between $ 100,000 and $ 250,000 fell 28%, while sales of homes between $ 500,000 and $ 750,000 rose 32% and sales of homes between $ 750,000 and $ 1 million. dollars rose 53%.
The housing stock at the end of July stood at 1.32 million units, up 7.3% from June supply and down 12.0% from a year ago. a year. The unsold inventory stands at a supply of 2.6 months at the current pace of sales, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.
“After months of plumbing new lows, stocks for sale have started to rebound significantly in recent months as sellers come out of the woods, giving homebuyers more options and likely easing some of the pressure. on the rise on home prices in the coming months, “Zillow economist Matthew Speakman said in a press release after the results. “It may not be obvious from the existing July home sales data, but signs are emerging that a greater equilibrium may slowly return to the housing market, giving buyers a few more options. to work with ways that could result in more home sales in the coming month. “
Yun said there are more homes for sale than two or three months ago and that he expects inventory levels to increase throughout the year. As more homes become available for sale, record home price growth is expected to moderate.
Last month, the S&P CoreLogic Case-Shiller National Home Price Index posted an annual gain of 16.6% in May, up from 14.8% in April – marking the highest reading in more than 30 years of data.
“We believe a more accurate description of the impact of COVID on the housing market is that it triggered a temporary but massive increase in demand for single-family homes in the suburbs, at a time when stocks were already quite low. “Pantheon Macroeconomics said. in a research note before the data is released. “The result was a price explosion. But the explosions don’t last long, and as the dust settles it’s clear that demand has now returned to its pre-pandemic level. “
Amanda Fung is a writer at Yahoo Finance.
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