Home Inventory Ticks Up While Home Sales Increase
For the second month in a row, existing home sales have increased, according to the National Association of Realtors (NAR). What’s more, three of the four major sales regions in the country recorded month-over-month sales gains, while the fourth remained steady. Year-over-year sales were more variable, with two regions posting gains, one posting a decline, and one remaining level.
Inventory Has Improved
The rise in home sales can be attributed in part to improving inventory levels, which, according to Lawrence Yun, chief economist for NAR, will help ease the intensity of multiple offers. “Much of the home sales growth is still occurring in the upper-end markets,” he added, “while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.” By the end of July, total housing inventory across the country climbed to 1.32 million units, up 7.3% month over month but down 12% year over year. At the current sales pace, unsold inventory would supply the market for only 2.6 months.
Homes Are Selling Quickly at Higher Prices
For the past 113 months in a row, the median-existing home price has climbed. Every region in the country saw gains in housing prices. The average property remained available for sale for just 17 days in July, unchanged from a month earlier; in comparison, homes remained on the market for 22 days in July 2020. Of all the homes sold in July 2021, 89% were purchased in under one month. While Yun doesn’t believe home prices will be dropping in the months ahead, he does foresee a leveling off as inventory levels improve. “In the meantime,” said Yun, “some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates.”
First-time buyers accounted for 30% of all home sales in July, down from 31% a month earlier and 34% a year earlier. Twenty-three percent of all July’s transactions were all cash; individual investors and second-home buyers—two groups who account for the majority of cash sales—were responsible for 15% of all home transactions, up from 14% a month earlier and unchanged from a year earlier.
Northeast - Existing-home sales annual rate of 740,000; unchanged from June 2021 but an increase of 12.1% from July 2020. The median sales price increased 23.6% from July 2020.
Midwest - Existing-home sales annual rate of 1.38 million; an increase of 3.8% from June 2021 but a decrease of 1.4% from July 2020. The median sales price increased 13.1% from July 2020.
South - Existing-home sales annual rate of 2.63 million; an increase of 1.2% from June 2021 and 1.2% from July 2020. The median sales price increased 14.4% from July 2020.
West - Existing-home sales annual rate of 1.24 million; an increase of 3.3% from June 2021 but unchanged from July 2020. The median sales price increased 12.5% from July 2020.