NAR: Existing-Home Sales Still Falling

“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said NAR chief economist Lawrence Yun. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers.”

The median existing-home price was $403,800 in July, a 10.8% boost year-on-year (YoY). The result marked the 125th straight month of YoY gains, and the longest-running streak on record.

Yun said the market is in the midst of a housing recession, even while properties averaged just 14 days on the market – the lowest total on record. “It’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”

Houses are still selling in record time, and first-time buyers are responsible for 29% of sales. “Buying a home remains a worthwhile investment that brings an unmatched combination of security, freedom and accomplishment associated with the American dream,” stated Leslie Rouda Smith, NAR president and a broker associate at Dave Perry-Miller Real Estate in Dallas.

Single-family home sales decreased 5.5% in July, down from 4.56 million the month prior and down 19% YoY. Condo and co-op sales declined even more at 9.1% month-on-month (MoM) and down 29.6% YoY.

All-cash sales decreased 1% from June to 24% of transactions, while individual investors or second-home buyers made up 14%. Foreclosures and short sales only contributed 1%.

Regionally, sales in the Northeast decreased 7.5% from June to 620,000. The Midwest saw a 3.3% decline MoM to 1,190,000, while the South dwindled 5.3% to 2,130,000. Sales in the West shrank 9.4% to 870,000 over the same period.

The most significant YoY average list price increases were reported in Miami, Memphis, and Orlando.

NAR has been tracking existing home sales since May 2011.

By Becca Moczygemba, Becca@SteelMarketUpdate.com