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Existing home sales in the United States increased 2.5% in June and reached an annual pace of five million sales for the first time since October 2013, according to the latest index from the National Association of Realtors.

The median existing home price for all housing types in June was $223,300, which is 4.3% above June 2013. This marks the 28 th consecutive month of year on year price gains, the index shows.

It also says that rising inventory continues to push overall supply towards a more balanced market, but sales remain 2.3% below the 5.16 million unit level a year ago.

‘Inventories are at their highest level in over a year and price gains have slowed to much more welcoming levels in many parts of the country,’ said Lawrence Yun, NAR chief economist.

‘This bodes well for rising home sales in the upcoming months as consumers are provided with more choices. On the contrary, new home construction needs to rise by at least 50% for a complete return to a balanced market because supply shortages, particularly in the West, are still putting upward pressure on prices,’ he explained.

He also noted that stagnant wage growth is holding back what should be a stronger pace of sales. ‘Hiring has been a bright spot in the economy this year, adding an average of 230,000 jobs each month. However, the lack of wage increases is leaving a large pool of potential homebuyers on the side lines who otherwise would be taking advantage of low interest rates. Income growth below price appreciation will hurt affordability,’ he added.

Total housing inventory at the end of June rose 2.2% to 2.3 million existing homes available for sale, which represents a 5.5 month supply at the current sales pace, unchanged from May. Unsold inventory is 6.5% higher than a year ago, when there were 2.16 million existing homes available for sale.

The data shows that distressed homes, that is foreclosures and short sales, accounted for 11% of June sales, down from 15% in June 2013. Some 8% of June sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 20% below market value in June, while short sales were discounted 11%.
   
The percent share of first time buyers continues to underperform historically, rising slightly to 28% in June from 27% in May, but remain at an overall average of 28% over the past year.
 
Properties sold faster for the sixth consecutive month in June, highlighting the fact that inventory is still lagging relative to demand. The median time on market for all homes was 44 days in June, down from 47 days in May. It was 37 days on market in June 2013. Short sales were on the market for a median of 120 days in June, while foreclosures sold in 54 days and non-distressed homes typically took 42 days. Some 42% of homes sold in June were on the market for less than a month.

For the third consecutive month, as well as the average of the previous 12 months, all cash sales in June were 32% of transactions, up from 31% in June 2013. Individual investors, who account for many cash sales, purchased 16% of homes in June, unchanged from May and much the same as June 2013 when they were 17%. Some 69% of investors paid cash in June.

Single family home sales rose 2.5% to a seasonally adjusted annual rate of 4.43 million in June from 4.32 million in May, but remain 2.9% below the 4.56 million pace a year ago. The median existing single-family home price was $224,300 in June, up 4.5% from June 2013.

Existing condominium and co-op sales increased 3.4% to a seasonally adjusted annual rate of 610,000 units in June from 590,000 in May, and are 1.7% above the 600,000 unit pace a year ago. The median existing condo price was $215,700 in June, which is 3.2% higher than a year ago.

Regionally, existing home sales in the Northeast rose 3.2% to an annual rate of 640,000 in June, but are 3% below a year ago. The median price in the Northeast was $269,800, some 0.1% below June 2013.

In the Midwest, existing home sales jumped 6.2% to an annual rate of 1.2 million in June, but remain 2.4% below June 2013. The median price in the Midwest was $177,900, up 4.6% from a year ago.

Existing home sales in the South inched 0.5% higher to an annual level of 2.06 million in June, and are up 1% from June 2013. The median price in the South was $192,600, up 3.4% from a year ago.

Existing home sales in the West rose 2.7% to an annual rate of 1.14 million in June, but remain 7.3% below a year ago. The median price in the West was $301,000, which is 7.2% above June 2013.

This article was repupublished with permission from Property Wire.