Purchases of previously owned homes increased 2 percent to a 5.59 million annualized rate last month from a revised 5.48 million pace in June, the NAR said.
Advertisement
“Pent-up supply is being released and existing owners are feeling more confident to place their homes on the market, helping to drive the actual sales level higher and close the gap between market capacity and actual existing-home sales quickly”. “The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now”, he said.
Steady job growth and historically low mortgage rates have convinced current homeowners to purchase homes, while first-time buyers remain relatively scarce.
The report also said the median existing home price for all housing types was $234,000 in July, which is down 1 percent from $236,300 in June but up 5.6 percent from $221,600 a year ago.
Existing home sales have increased on a year-over-year basis for 10 consecutive months and are now 10.3% higher than in May 2014.
There were 2,198 listing in July, up 1 percent from July past year.
July existing home sales in the Northeast decreased 2.8% to an annual rate of 700,000, but are still 9.4% above a year ago.
First-time buyers, important for spurring momentum in the market, declined for the second month in a row, from 30 percent of all buyers in June to 28 percent. As more current homeowners are returning to the real estate market for an upgrade or to downsize while approaching retirement, home sales have sky-rocketed.
Investors and financial experts are watching for an anticipated interest-rate increase by the Federal Reserve next month, which could bring higher rates for home loans.
Still, there is only a 4.8-month supply of homes on the market, down from 4.9 months in June, which is pushing up prices and making home buying more hard. All-cash transactions made up about 23 percent, down from 29 percent a year earlier and a sign that investors are gradually stepping out of the market. On the other hand, condos actually fell by 3.1% in July to an annual rate of 630,000 units.
Advertisement
The average rate on a 30-year fixed mortgage is below 4 percent, less than a half percentage point above the 3.6 percent rate in February that was the lowest since May 2013, according to Freddie Mac data. The shift toward renting has reduced vacancies and caused rental prices to increase at 4.3 percent, more than double the meager 2.1 annual increase in average hourly wages. Short sales were on the market the longest at a median of 135 days in July, while foreclosures sold in 49 days and non-distressed homes took 41 days. The median price in the South was $203,500, up 7% from a year ago.
