Existing Home Sales Fell 1.3% in July, But Up 2.1% YOY

Washington, DC, August 24, 2017-Total existing-home sales slipped 1.3% to a seasonally adjusted annual rate of 5.44 million in July from a downwardly revised 5.51 million in June, according to the National Association of Realtors.

 July’s sales pace is still 2.1% above a year ago, but is the lowest of 2017.

Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”

The median existing-home price for all housing types in July was $258,300, up 6.2% from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.

Total housing inventory at the end of July declined 1.0% to 1.92 million existing homes available for sale, and is now 9.0% lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.

“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”

Properties typically stayed on the market for 30 days in July, which is up from 28 days in June but down from 36 days a year ago. Fifty-one percent of homes sold in July were on the market for less than a month.

Inventory data from realtor.com reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in July were Seattle-Tacoma-Bellevue, Washington, 28 days; San Jose-Sunnyvale-Santa Clara, California, 30 days; and Salt Lake City, Utah, and Vallejo-Fairfield, California, 31 days.

“July was the fourth consecutive month that the typical listing went under contract in under one month,” said Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”

First-time buyers were 33% of sales in July, which is up from 32 percent both in June and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers revealed that the annual share of first-time buyers was 35%.