RISMEDIA, August 25, 2009-For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®. Existing-home sales- including single-family, townhomes, condominiums and co-ops- rose 7.2% to a seasonally adjusted annual rate of 5.24 million units in July from a level of 4.89 million in June, and are 5.0% above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
Lawrence Yun, NAR chief economist, said he is encouraged. “The housing market has decisively turned for the better. A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales,” he said. The monthly sales gain was the largest on record for the total existing-home sales series dating back to 1999. “Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix, and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint,” Yun said.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.22% in July from 5.42% in June; the rate was 6.43% in July 2008.
An NAR practitioner survey showed first-time buyers purchased 30% of homes in July, and that distressed homes accounted for 31% of transactions.
NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said the first-time buyer tax credit is working. “In addition to first-time buyers, we’re also seeing increased activity by repeat buyers. While many entry-level buyers are focused on the discounted prices of distressed homes, they’re also freeing some existing owners to sell and make a move,” he said. “Realtors® are the best resource for consumers in these changing market conditions because the transaction process has become more complex. Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September,” McMillan said. “Otherwise, they may miss the November 30 closing deadline.”
Total housing inventory at the end of July rose 7.3% to 4.09 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, which was unchanged from June because of the strong sales gain. Raw inventory totals are 10.6% lower than a year ago when the number of unsold homes was at a record.
The national median existing-home price for all housing types was $178,400 in July, which is 15.1% lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20% less than traditional homes. Single-family home sales increased 6.5% to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0% higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6% below a year ago. Existing condominium and co-op sales jumped 12.5% to a seasonally adjusted annual rate of 630,000 units in July from 560,000 in June, and are 5.9% above the 595,000-unit level a year ago. The median existing condo price was $178,800 in July, down 18.9% from July 2008.
Regionally, existing-home sales in the Northeast surged 13.4% to an annual pace of 930,000 in July, and are 3.3% higher than July 2008. The median price in the Northeast was $236,700, down 15.0% from a year ago.
Existing-home sales in the Midwest jumped 10.9% in July to a level of 1.22 million and are 8.0% above a year ago. The median price in the Midwest was $157,200, which is 5.9% less than July 2008.
In the South, existing-home sales rose 7.1% to an annual pace of 1.95 million in July and are 5.4% higher than July 2008. The median price in the South was $164,500, down 7.1% from a year ago.
Existing-home sales in the West slipped 1.7% to an annual rate of 1.13 million in July, but are 1.8% above a year ago. The median price in the West was $202,300, which is 28.0% below July 2008.
For more information, visit www.realtor.org.