July Existing-Home Sales at Highest Pace Since February 2007
Washington, DC, August 20, 2015—Existing-home sales steadily increased for the third consecutive month in July, rising 2.0%, while stubbornly low inventory levels and rising prices are likely to blame for sales to first-time buyers falling to their lowest share since January, according to the National Association of Realtors (NAR).
Total existing-home sales increased to a seasonally adjusted annual rate of 5.59 million in July from a downwardly revised 5.48 million in June.
Sales in July remained at the highest pace since February 2007 (5.79 million), have now increased year-over-year for ten consecutive months and are 10.3% above a year ago (5.07 million).
Lawrence Yun, NAR chief economist, says the increase in sales in July solidifies what has been an impressive growth in activity during this year's peak buying season. "The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now," he said. "As a result, current homeowners are using their increasing housing equity towards the downpayment on their next purchase."
The median existing-home price for all housing types in July was $234,000, which is 5.6% above July 2014. July's price increase marks the 41st consecutive month of year-over-year gains.
Total housing inventory at the end of July declined 0.4% to 2.24 million existing homes available for sale, and is now 4.7% lower than a year ago (2.35 million). Unsold inventory is at a 4.8-month supply at the current sales pace, down from 4.9 months in June.
The percent share of first-time buyers declined in July for the second consecutive month, falling from 30% in June to 28%, the lowest share since January of this year (also 28%). A year ago, first-time buyers represented 29% of all buyers.
"The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face," adds Yun. "Rising rents and flat wage growth make it difficult for many to save for a downpayment, and the dearth of supply in affordable price ranges is limiting their options."