In the US, sales of previously owned homes increased by 2% in July compared to June, reaching 4.01 million units on a seasonally adjusted annual basis. Housing market analysts had expected a slight decrease. Sales turned out to be 0.8% higher than in July 2024. This was reported by CNBC, citing data from the National Association of Realtors (NAR), writes UNN.
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These sales are accounted for at the time of closing, so contracts were likely concluded in May and June, when the average rate for a 30-year fixed mortgage was declining. According to Mortgage News Daily, this rate briefly exceeded 7% in May, and then was 6.67% by the end of June.
At the end of July, 1.55 million homes were listed for sale, which is 15.7% more than last month last year. At current sales rates, this corresponds to a 4.6-month supply. A six-month supply is considered balanced between buyer and seller.
The current supply level is at its highest since May 2020, but still significantly lower than in the pre-COVID period.
The increase in supply obviously reduces pressure on prices. The median sales price of an existing home in July was $422,400, up 0.2% from the same month a year earlier, and a record high price for July. Prices have been rising annually for the past 25 months, but the market may now be at a turning point, the publication writes.
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"A slight improvement in housing affordability is gradually increasing home sales," said Lawrence Yun, NAR's chief economist. "Wage growth is now confidently outpacing home price growth, and buyers have more choices."
Yun noted that condominium sales increased in the southern US, where prices have been declining for the past year.
The highest activity, as before, is observed in the more expensive segment of the market. Sales of homes worth more than $1 million increased by 7.1% year-on-year, while sales of homes worth $100,000 to $250,000 decreased by 0.1%. Sales of homes below $100,000 fell by 8%.
Home sales began to take longer. In July, the average time to sell a home was 28 days, compared to 24 days a year earlier. The number of first-time homebuyers also decreased slightly, accounting for 28% of total sales compared to 30% in June and 29% in July 2024.
Investors accounted for 20% of all transactions compared to 13% in July 2024. This may be due to the increase in supply.
With mortgage rates remaining relatively high, the share of buyers paying for housing exclusively in cash increased to 31% of total transactions from 27% a year earlier.
"This is an extremely high figure," Yun said, noting that market value of stocks or housing affordability could be determining factors.
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