Existing Sales Grow – Except for First-Time Buyers

Existing home sales, as reported by the National Association of Realtors, increased for the third consecutive month in July, and remained at the highest level since February 2007; but the first-time buyer share fell for the second consecutive month to the lowest level since January. Total existing home sales increased by 2.0% in July to a seasonally adjusted rate of 5.59 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly revised 5.48 million units in June. July existing sales were up 10.3% from the same period a year ago, and have increased year-over-year for ten consecutive months.

Existing Home Sales July 2015

Existing sales increased in by 4.1% in the South and 3.2% in the West, but were flat in the Midwest and fell 2.8% in the Northeast. Year-over-year, all four regions also increased, ranging from 11.3% in the West to 9.4% in the Northeast.

Total housing inventory in July decreased by 0.4% from June, and is 4.7% below its level a year ago. At the current sales rate, the July unsold inventory represents a 4.8-month supply, down from 4.9 months in June. Some 43% of existing homes in July were on the market for less than a month, down from 47% the previous month which was the highest share since June 2013.

The distressed sales share decreased to 7% in July, down from 8% in June and 10% in May, compared favorably to the 9% share during the same month a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts. The July all cash sales share increased to 23% from 22% the previous month which matched the lowest share since December 2009. Individual investors purchased a 13% share compared to the 12 % share of homes in June, and 16% in July of 2014. The withdrawal of cash investors will create more opportunity for first-time buyers.

The July median sales price of $234,000 was 5.6% above the same month a year ago, and represented the 41st consecutive month of year-over-year price increases. The median condominium/co-op price decreased to $221,800 in July, but was up 3.2% from the same month a year ago.

The Pending Home Sales Index fell 1.8% in May. Although total existing sales continued to grow in July, the first-time buyer share slipped.

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