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More home sellers are trying to snag some of the highest prices on record. That is helping to lift housing inventories and home sales.
After four consecutive months of declines, existing-home sales increased 1.4% on a seasonally adjusted annual rate from May to June, the National Association of REALTORS® reported on Thursday. Sales are up nearly 23% compared to a year ago. Total existing-home sales reflect completed transactions for single-family homes, townhomes, condos, and co-ops. All four major regions of the U.S. posted a double-digit year-over-year increase in sales last month.
“Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales,” said Lawrence Yun, NAR’s chief economist. “Home sales continue to run at a pace above the rate seen before the pandemic.”
Home prices also continued to rise. The median existing-home sales price increased by 23.4% over last year's levels, the second highest level recorded since 1999, NAR reports. The median existing-home price for all housing types in June was $363,300.
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
Here’s a closer look at key indicators from NAR’s latest housing report.
- Housing inventories: The inventory of unsold homes rose 3.3% to 1.25 million in June month over month. Still, inventories are down 18.8% from a year ago. Unsold inventory is at a 2.6-month supply at the current sales pace.
- Days on the market: Eighty-nine percent of homes sold in June were on the market for less than a month. Homes on the market typically sold in 17 days nationwide in June.
- First-time buyers: First-time buyers comprised 31% of sales in June, down from 35% a year earlier.
- Investors and second-home buyers: Individual investors and second-home buyers accounted for 14% of home sales in June, up from 9% in June. Investors and second-home buyers make up the bulk of cash sales. All-cash sales accounted for 23% of transactions in June, up from 16% a year ago.
“Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun says. “Although rates are favorably low, these hurdles have been overwhelming to some potential buyers.”
Regional Breakdown
Here’s how existing-home sales fared across the country in June:
- Northeast: Existing-home sales rose 2.8% in June, a 45.1% uptick compared to a year ago. Median price: $412,800, up 23.6% from June 2020
- Midwest: Existing-home sales increased 3.1% to an annual rate, an 18.8% increase from a year ago. Median price: $278,700, an 18.5% increase from a year ago
- South: Existing-home sales were unchanged from May, up 19.4% from the same time one year ago. Median price: $311,600, a 21.4% climb from one year ago
- West: Existing-home sales climbed 1.7%, a 23.7% jump from a year ago. Median price: $507,000, up 17.6% from June 2020