Existing home sales in the United States increased in June to their highest pace in over eight years, according to the latest monthly data report from the National Association of Realtors.
It also shows that the cumulative effect of rising demand and limited supply has helped push the national median sales price to an all-time high of $236,400.
Sales increased by 3.2% and all regions experienced sales gains in June and have now risen above year on year levels for six consecutive months.
Sales are now at their highest pace since February 2007 and have increased year on year for nine consecutive months and are 9.6% above a year ago.
‘Buyers have come back in force, leading to the strongest past two months in sales since early 2007. This wave of demand is being fueled by a year plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy,’ said Lawrence Yun, NAR chief economist.
‘June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,’ he added.
The median existing home price for all housing types in June was $236,400, which is 6.5% above June 2014 and surpasses the peak median sales price set in July 2006 of $230,400. June's price increase also marks the 40th consecutive month of year on year gains.
The data also shows that total housing inventory at the end of June inched 0.9% to 2.3 million existing homes available for sale, and is 0.4% higher than a year ago when it was 2.29 million. Unsold inventory is at a five month supply at the current sales pace, down from 5.1 months in May.
‘Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers. Local officials in recent years have rightly authorized permits for new apartment construction, but more needs to be done for condominiums and single family homes,’ Yun explained.
The percent share of first time buyers fell to 30% in June from 32% in May, but remained at or above 30% for the fourth consecutive month. A year ago, first time buyers represented 28% of all buyers.
Properties typically stayed on the market for 34 days in June, down from 40 days in May and the shortest time since NAR began tracking in May 2011. Short sales were on the market the longest at a median of 129 days in June, while foreclosures sold in 39 days and non-distressed homes took 33 days. Some 47% of homes sold in June were on the market for less than a month, the highest percentage since June 2013.
According to NAR president Chris Polychron, real estate agents are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West. ‘The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price,’ he said.
‘Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they're not optimistic they'll have adequate time to find an affordable property to move into,’ he added.
Matching the lowest share since December 2009, all-cash sales were 22% of transactions in June, down from 24% in May and 32% a year ago. Individual investors, who account for many cash sales, purchased 12% of homes in June compared to 14% in May, the lowest since August 2014 and down from 16% in June 2014. Some 66% of investors paid cash in June.
Distressed sales fell to 8% in June, matching an August 2014 low, from 10% in May, and are below the 11% recorded a year ago. Overall 6% of June sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 15% below market value in June, unchanged from May, while short sales were discounted 18% compared to 16% in May.
Single family home sales increased 2.8% to a seasonally adjusted annual rate of 4.84 million in June from 4.71 million in May, and are now 9.8% above the 4.41 million pace a year ago. The median existing single family home price was $237,700 in June, up 6.6% from June 2014 and surpassing the peak median sales price set in July 2006 of $230,900.
Existing condominium and co-op sales rose 6.6% to a seasonally adjusted annual rate of 650,000 units in June from 610,000 units in May, up 8.3% from June 2014 and the highest pace since May 2007. The median existing condo price was $226,500 in June, which is 5.5% above a year ago and the highest since August 2007 when it was $229,200.
A regional breakdown of the figures show that in June existing home sales in the Northeast climbed 4.3% to an annual rate of 720,000, and are now 12.5% above a year ago. The median price in the Northeast was $281,200, which is 3.9% higher than June 2014.
In the Midwest, existing home sales rose 4.7% to an annual rate of 1.33 million in June, and are 12.7% above June 2014. The median price in the Midwest was $190,000, up 7.2% from a year ago.
Existing home sales in the South increased 2.3% to an annual rate of 2.2 million in June, and are 7.3% above June 2014. The median price in the South was $205,000, up 7.2% from a year ago.
Existing home sales in the West rose 2.5% to an annual rate of 1.24 million in June, and are 8.8% above a year ago. The median price in the West was $328,900, which is 9.9% above June 2014.
This article was republished with permission from Property Wire.