Home sales decreased in June thanks to low housing supply, according to the National Association of Realtors. The Midwest was the only area nationally with increased sales last month.
Total existing-home sales (completed transactions that include single-family homes, townhomes, condos and co-ops) decreased by 1.8 percent to a seasonally-adjusted annual rate of $5.52 million in June compared to $5.62 million in May. June’s $5.52 million is still 0.7 percent above June 2016, but it is the second lowest total of this year. February is the lowest month of sales this year with $5.47 million.
“The demand for buying a home is as strong as it has been since before the Great Recession,” Lawrence Yun, NAR Chief Economist, said in a recent press release. “Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
June saw the effects of the low housing supply with the total houses of all types declining by 0.5 percent. Housing inventory in June equaled 1.96 million while last year saw 2.11 million available homes for sale, according to NAR. This 7.1 percent decrease upholds a decreased year-over-year pattern for 25 consecutive months.
NAR reports a 3.1 percent increase in existing-home sales for the Midwest, the only area not experiencing decreases in sales. The annual rate of sales increased to 1.32 million in June, the same amount as June 2016. Median home price in the Midwest also increased by 7.7 percent since June of last year to $213,000.
Increasing Prices Keep Some Buyers Away
Market challenges like a shortage in homes for sale allow for increases in average home prices. June showed this pricing increase thanks to low supply with a 6.5 percent increase in the median existing-home price, NAR reports. The median price in June 2016 was $247,600 compared to this year’s median of $263,800. This is the 64th straight month with year-over-year gains.
“Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year,” Yun said.
First-time buyers accounted for 32 percent of sales in June, down 1 percent from May and June 2016. According to NAR’s 2016 Profile of Home Buyers and Sellers, the annual number of first-time buyers was 35 percent, June 2017’s percent falling short of that figure by 3 percent. All-cash sales also decreased in June to 18 percent from 22 percent in May. June’s amount of all-cash sales is the lowest since the same month in 2009 (13 percent).
How Single-Family Homes, Condos and Co-ops Fare
Single-family home sales fell in a pattern similar to June’s other decreases. In June, they dropped by 2 percent to a seasonally-adjusted annual rate of 4.88 million, down by 100,000 in May. However, sales are still 0.6 percent above the 4.85 million pace from the previous year, NAR reports.
Condo and co-op sales were at a seasonally-adjusted annual rate of 640,000 units in June, equal to May. According to NAR, sales are 1.6 percent higher than last year and existing condo prices increased by 6.5 percent to $245,900 in June compared to a year ago.