Existing home sales in the US rose again in July, making it two consecutive months of gains.
According to data released from the National Association of Realtors showed that sales of existing homes in July increased 2% from June to a seasonally adjusted, annualized rate of 5.99 million units.
July’s increase surprised market analysts who had forecast sales would fall to a rate of 5.83 million units in July.
Home resales, which account for the majority of home sales in the US, rose 1.5% on an annual basis. The median sales price fell to $359,900 from June’s record level. However, the figure was still up 17.8% from the same period a year earlier.
Lawrence Yun, the National Association of Realtors chief economist, said of the data:
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,”
“Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
Supply Increases
Sales are improving most likely due to increasing supply. The inventory of homes at the end of last month stood at 1.32 million, down 12% from a year ago. However, that is a smaller annual decline than in the past few months. At the current sales rate, this constitutes a 2.6-month supply. A six-month supply is regarded as a balanced market between buyers and sellers.
Danielle Hale, chief economist at Realtor.com, commented:
“Continued economic recovery is key to maintaining sales momentum, and anything that disrupts progress, such as rising Covid cases, could knock home sales off course,”
“Still, with listing price growth beginning to recalibrate in response to shifting supply and demand dynamics, we should see a steady pace of home sales over the next few months, especially if mortgage rates remain low.”
