Home prices and sales shift a bit
According to the National Association of Realtors (NAR), sales of existing homes fell 1.2 percent in June, while the median price 5.5 percent for the month, but more impressive are the annual improvements – sales are up 15.2 percent from June 2012 and prices are up 13.5 percent during the same period. June marks the seventh consecutive month of double-digit year-over-year increases and the 16th consecutive month of annual price increases which has not taken place since February 20115 to May 2006. Sales have been expected to fall slightly as mortgage application volume continues to slide, pointing to the first step of the transaction seeing a reduction.
Dr. Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates. “Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” he said. “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”
Inventory conditions favor sellers
Total housing inventory in June actually rose 1.9 percent, hitting a 5.2 month supply at the current sales pace, yet listed inventory remains 7.6 percent below June 2012.
“Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Dr. Yun remarked.
Distressed sales fell
Distressed homes accounted for 15 percent of June sales, falling 18 percent for the month, and are at the lowest share since monthly tracking began in October 2008. The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the price growth.
In June, 8.0 percent of sales were foreclosures, selling at an average discount of 16 percent while 7.0 percent of sales were short sales, discounted an average of 13 percent below market.
Time on market falls
The median time on market for all homes was 37 days in June, down from 41 days in May, which NAR says is 47 percent 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.
Nearly half of all homes sold in June were on the market for less than a month.
First time buyers being held back
First-time buyers accounted for 29 percent of purchases in June, down 1.0 percent for the month and 3.0 percent for the year.
Dr. Yun said, “First-time buyers should be closer to 40 percent 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 U.S.”
NAR reports that all-cash sales made up 31 percent of transactions in June, down from 33 percent in May; they were 29 percent in June 2012. Individual investors, who account for many cash sales, purchased 17 percent of homes in June, down from 18 percent in May and 19 percent in June 2012.
Prices improve the most in the West
Regionally, existing-home sales in the Northeast declined 1.6 percent to an annual rate of 630,000 in June but are 16.7 percent above June 2012. The median price in the Northeast was $270,400, which is 6.8 percent 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 percent higher than a year ago. The median price in the Midwest was $170,100, up 8.9 percent from June 2012.
In the South, existing-home sales slipped 1.5 percent to an annual level of 2.03 million in June but are 16.0 percent above June 2012. The median price in the South was $186,300, which is 13.7 percent above a year ago.
Existing-home sales in the West declined 1.6 percent to a pace of 1.21 million in June but are 11.0 percent above a year ago. With ongoing supply constraints, the median price in the West was $282,000, a jump of 19.9 percent from June 2012.
