May 27, 2018

Home Sales Down, Inventory Up

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Home Sales Down, Inventory Up

Existing-home sales declined in June, but have remained well above year-ago levels for the past two years. Also, the median price shows seven straight months of double-digit, year-over-year increases, according to the National Association of REALTORS®.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 1.2 percent to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2 percent higher than the 4.41 million-unit level in June 2012.

“Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand,” said Lawrence Yun, NAR chief economist.  “However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

The dip in sales helped bring housing inventory up 1.9 percent to a total of 2.19 million existing homes available for sale. That number represents more than a five month’s supply at the current sales pace. But listed inventory remains 7.6 percent below a year ago, when there was a 6.4-month supply.  

“Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth,” Yun predicted.

The national median existing-home price for all housing types was $214,200 in June, up 13.5 percent from June 2012.  This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.

Distressed sales were 15 percent of the market in June, down from 18 percent in May, 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. Foreclosures sold for an average discount of 16 percent below market value in June, while short sales were discounted 13 percent.

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.

Source: National Association of REALTORS®

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Existing-Home Sales Up in May