Existing-home sales strengthened in July, a positive reversal after total sales were down slightly in the previous month, according to the National Association of Realtors. Although Northeast transactions declined, the other three major U.S. regions recorded sales increases, including vast growth in the West last month.
Total existing-home sales, according to the NAR, completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.5% from June to a seasonally adjusted annual rate of 5.42 million in July. Overall sales are up 0.6% from a year ago (5.39 million in July 2018).
Home price appreciation has been much stronger in the lower-price tier compared to homes sold in the upper-price tier, based on the analysis of proprietary deed records data from Black Knight, Inc. and Realtors Property Resource.
Of the same homes that were sold in 2018 that were purchased in 2012 in 13 large metro areas (repeat sales transactions), the lower half of the market had increased by more than 100% in 2018 in metro areas like Atlanta–Sandy-Springs–Roswell, Ga. (165%), Denver–Aurora–Lakewood, Colo. (103%), Miami–Fort-Lauderdale, FL, (119%) and Tampa–St. Petersburg-Clearwater, FL (125%). The median home price for homes purchased in the upper half of the market in these same metro areas in 2012 increased at a much slower pace when sold in 2018.
The median existing-home price for all housing types in July was $280,800, up 4.3% from July 2018 ($269,300). July’s price increase marks the 89th straight month of year-over-year gains.
Total housing inventory at the end of July decreased to 1.89 million, down from 1.92 million existing-homes available for sale in June, and a 1.6% decrease from 1.92 million one year ago. Unsold inventory is at a 4.2-month supply at the current sales pace, down from the 4.4 month-supply recorded in June and down from the 4.3-month supply recorded in July of 2018.
Properties typically remained on the market for 29 days in July, up from 27 days in June and up from 27 days in July of 2018. Fifty-one percent of homes sold in July were on the market for less than a month.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.77% in July, down from 3.80% in June. The average commitment rate across all of 2018 was 4.54%.
First-time buyers were responsible for 32% of sales in July, down from 35% the month prior and about equal to the 32% recorded in July 2018. NAR’s 2018 Profile of Home Buyers and Sellers – released in late 2018 – revealed that the annual share of first-time buyers was 33%.
As the share of first-time buyers rose, individual investors or second-home buyers, who account for many cash sales purchased 11% of homes in July, up from 10% recorded in June 2019 and down from 12% recorded in July a year ago. All-cash sales accounted for 19% of transactions in July, up from June and down from July of 2018 (16% and 20%, respectively).