After four months of declines, existing home sales increased for the second consecutive month in July as housing inventory continued to improve, according to the National Association of Realtors (NAR). Though the median existing home price in July remained elevated, home prices may level off if inventory gradually increases in the coming months.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, increased 2.0% to a seasonally adjusted annual rate of 5.99 million in July. On a year-over-year basis, sales were 1.5% higher than a year ago.
The first-time buyer share slightly dropped to 30% in July, down from 31% in June and down from 34% a year ago. The July inventory level increased from 1.23 to 1.32 million units but is still down from 1.50 million units a year ago.
At the current sales rate, the July unsold inventory sit at a 2.6-month supply, slightly up from June’s 2.5-month but still down from 3.1-month a year ago. This low level supply of resale homes is good news for home construction.
Homes stayed on the market for an average of just 17 days in July, an all-time low, unchanged from June and down from 22 days a year ago. In July, 89% of homes sold were on the market for less than a month.
The July all-cash sales share was 23% of transactions, even with last month and up from 16% a year ago.
Tight supply continues to push up home prices. The July median sales price of all existing homes was $359,900, up 17.8% from a year ago, representing the 113rd consecutive month of year-over-year increases. The median existing condominium/co-op price of $307,100 in July was up 14.1% from a year ago.
Geographically, three of four regions saw an increase in existing home sales in July, ranging from 1.2% in the South to 3.8% in the Midwest. Sales in the Northeast remained flat in July. On a year-over-year basis, sales rose 12.1% and 1.2% in the Northeast and South, while sales fell 1.4% in the Midwest. Sales in the West stayed unchanged.
Meanwhile, the Pending Home Sales Index (PHSI), also reported by the NAR, is a forward-looking indicator based on signed contracts. The PHSI decreased 1.9% from 115.0 to 112.8 in June. On a year-over-year basis, sales were 1.9% lower than a year ago.