NAR’s new existing home-sales report shows the sales pace quickening, inventory rising and distressed sales falling.
As summer temperatures hit their peak in July, so did existing-home sales, which, as the National Association of Realtors today confirmed, marked their highest annual pace of the year.
Including transactions for single-family homes, townhomes, condominiums and co-ops, the NAR found that total existing-home sales rose 2.4 percent to a seasonally adjusted annual rate of 5.15 million in July. The increases represent four consecutive months of rate increases, as well as 2014’s highest pace. However, sales remain 4.3 percent below last July’s levels.
Inventory Up, Distressed Sales Down
While NAR’s report worked to showcase the increasing pace of sales, researchers at the national association included several other key stats to help further evaluate the wellness of the current housing market, such as:
- The median existing-home price rose again in July to $222,900, representing a 4.9 percent increase from July 2013 and 29 consecutive months of year-over-year price gains.
- Housing inventory took a much needed jump at the end of July, rising 3.5 percent to 2.37 million existing homes available, which brings overall inventory up to a 5.5 month supply at the current sales pace.
- For the first time since October 2008, when NAR began tracking distressed home sales, foreclosures and short sales fell into the single digits, dropping 15 percent year-over-year to make up just nine percent of total sales in July.
Short Step in a Long Journey
There’s been a lot of positive news around the real estate industry as of late, and Lawrence Yun, NAR’s chief economist, believes that it’s only the beginning of a much longer recovery, of which we’re still in.
“The number of houses for sales is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market,” he says. “More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”
There is a disclaimer, though. Yun says that despite interest rates dropping in the short-term, median family incomes are still struggling to keep pace with price gains, and the problem will be even more exacerbated when mortgage rates rise due to upcoming changes in monetary policy.
Still, the most impactful wounds sustained during the recent recession are beginning to fully heal, Yun points out.
“To put it in perspective, distressed sales represented an average of 36 percent of sales during all of 2009,” he says. “Fast-forward to today and rising home values are helping owners recover equity and strong job creation are assisting those who may have fallen behind on their mortgage due to unemployment or underemployment.”