Existing Home Sales Hit 2014 Peak in July

Existing home sales in July hit theirrnbest pace so far this year the National Association of Realtors® (NAR) saidrntoday, reflecting a 2.4 percent increase from June to a seasonally adjustedrnannual rate of 5.15 million units.   June’s sales were downgraded slightly to 5.03rnmillion units.  The July rate of sales markedrnthe fourth consecutive monthly increase but was still 4.3 percent under thernrate last July the month with the highest sales in all of 2013.</p

LawrencernYun, NAR chief economist, credited the slowly increasing sales momentumrnto stronger job growth and improving inventory conditions. “The number ofrnhouses for sale is higher than a year ago and tamer price increases are givingrnprospective buyers less hesitation about entering the market,” he said. “Morernpeople are buying homes compared to earlier in the year and this trend shouldrncontinue with interest rates remaining low and apartment rents on the rise.”</p

Affordability, Yun said, will likely decline in upcoming years. “Althoughrninterest rates have fallen in recent months, median family incomes are stillrnlagging behind price gains, and mortgage rates will inevitably rise with thernupcoming changes in monetary policy,” he said.  </p

Single-family home sales increased 2.7 percent to a seasonally adjustedrnannual rate of 4.55 million in July from 4.43 million in June, but were 4.2rnpercent below the 4.75 million pace a year earlier. Existing condominium andrnco-op sales were unchanged from June at an annual rate of 600,000 units, 4.8rnpercent below the 630,000 unit rate in July 2013.  </p

The median price of existing homes of all types increased 4.9 percent on anrnannual basis to $222,900, the 29^th consecutive month ofrnyear-over-year increases.   Single-family homes were priced at a median ofrn$223,900, 5.1 percent higher than a year earlier and the median condo wasrnpriced at $215,000, a 3.3 percent annual increase.  </p

The share of distressed homes – foreclosures and short sales – inrnJuly fell below double digits for the first time since NAR first tracked therncategory in October 2008.  Nine percentrnof all sales were distressed compared to 15 percent in July 2013.  This is in – line with figures announced onrnWednesday by CoreLogic which reported June distressed sales at 11.4 percent,rndown from 15.8 percent a year earlier.  </p

NAR said 6 percent of existing home sales were foreclosed property (REO) andrn3 percent short sales. Foreclosures sold for an average discount of 20 percentrnbelow market value while short sales were discounted 14 percent.</p

Yun says the deepest housing wounds suffered during the Great Recession arernbeginning to fully heal. “To put it in perspective, distressed salesrnrepresented an average of 36 percent of sales during all of 2009,” he said.rn”Fast-forward to today and rising home values are helping owners recover equityrnand strong job creation are assisting those who may have fallen behind on theirrnmortgage due to unemployment or underemployment.”  </p

Twenty-nine percent of transactions in July were all-cash sales, down fromrn32 percent in June and the lowest overall share since January 2013 when 28rnpercent of sales were cash. Individual investors, who account for many cashrnsales, purchased 16 percent of homes in July, unchanged from both last monthrnand July 2013. Sixty-nine percent of investors paid cash in July.</p

The percent share of first-time buyers rose slightly from 28 percent in Junernto 29 percent in July.  This was thernsecond consecutive monthly increase but the share of sales to first-timernborrowers remains historically low.</p

NAR President Steve Brown says the new credit scoring calculation recentlyrnannounced by Fair Isaac Corp., or FICO, will improve access to homeownership.rn”NAR supports efforts to broaden access to credit for qualified homebuyers,rnespecially those who have been shut out of the housing market or forced to payrnhigher interest rates because of flawed credit scores,” he said. “A solidrncredit score is necessary to keep borrowing costs down.”</p

The inventory of available existing homes for sale rose to 2.37 million atrnthe end of the reporting period, up 3.5 percent from the end of June.  This represents a 5.5-month supply at therncurrent sales pace. Unsold inventory is 5.8 percent higher than a year ago whenrnthere were 2.24 million existing homes available for sale.</p

Regionally, July existing-home sales in the Northeast were unchanged fromrnthe June annual rate of 640,000, 9.9 percent below a year ago. The median pricernin the Northeast was $273,600, an increase of 2.4 percent from July 2013.</p

Existing homes sales in the Midwest increased 1.7 percent to an annual levelrnof 1.22 million in July, but remain 4.7 percent below July 2013. The median pricernin the Midwest was $175,200, a 4.1 percent annual increase. </p

In the South sales rose 3.4 percent to an annual rate of 2.12 million, arnslight increase (0.5 percent) from July 2013. The median price in the South wasrn$192,000, up 5.0 percent from a year ago.</p

Sales in the West climbed 2.6 percent to a 1.17 million pace in July, but thisrnwas 8.6 percent below a year ago. The median price in the West was $304,100,rnwhich is 6.3 percent above July 2013.</p

The median time on market for all homes was 48 days in July compared to 44rndays in June and 42 days in July 2013. Short sales were on the market for arnmedian of 93 days, foreclosures sold in 58 days and non-distressed homesrntypically took 45 days. Forty percent of homes sold in July were on the marketrnfor less than a month.

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