NAR: Existing-Home Sales Increased 2.4% In July

Existing-home sales increased to a seasonally adjusted annual rate of 5.15 million in July, an increase of 2.4% from the 5.03 million in June and the highest annual pace so far this year, according to the National Association of Realtors (NAR).

NAR reports that existing-home sales data for June were slightly downwardly revised.

July marked the fourth consecutive month that existing-home sales increased on a month-over-month basis.

Still, existing-home sales remain 4.3% below the 5.38 million-unit pace seen in July 2013.

Increased inventory and an improving job market are helping to boost existing-home sales, explains Lawrence Yun, chief economist for NAR, in a release.

‘The number of houses for sale is higher than a year ago, and tamer price increases are giving prospective buyers less hesitation about entering the market,’ Yun says. ‘More people are buying homes compared to earlier in the year, and this trend should continue with interest rates remaining low and apartment rents on the rise.’

However, Yun warns that affordability is likely to decline in upcoming years.

‘Although interest rates have fallen in recent months, median family incomes are still lagging behind price gains, and mortgage rates will inevitably rise with the upcoming changes in monetary policy,’ he says.Â

The median existing-home price for all housing types in July was $222,900, an increase of 4.9% compared to July 2013.

On a year-over-year basis, home prices have increased for 29 consecutive months. However, home price appreciation has been slowing in recent months.

Total inventory of existing homes for sale at the end of July rose 3.5% to 2.37 million – a 5.5-month supply at the current sales pace. Unsold inventory is 5.8% higher than a year ago, when there were 2.24 million existing homes available for sale.

Meanwhile, distressed sales of existing homes continued to fall in July, dropping to 9% of all sales compared to 15% in July 2013. Of that 9%, about 6% were foreclosures while 3% were short sales. Foreclosures sold for an average discount of 20% below market value in July, while short sales were discounted 14%.

As distressed sales continue to fall, so, too, are all-cash sales. According to the report, about 29% of all existing-home sales in July were all-cash, compared to about 32% in June.

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