US house sales reach 8 year peak and all time high
Existing home sales in the United States increased in June to their highest pace in over eight years, according to the latest monthly data report from the National Association of Realtors.
It also shows that the cumulative effect of rising demand and limited supply has helped push the national median sales price to an all-time high of $236,400. Sales increased by 3.2% and all regions experienced sales gains in June and have now risen above year on year levels for six consecutive months.
Sales are now at their highest pace since February 2007 and have increased year on year for nine consecutive months and are 9.6% above a year ago.
‘Buyers have come back in force, leading to the strongest past two months in sales since early 2007. This wave of demand is being fuelled by a year plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy,’ said Lawrence Yun, NAR chief economist.
‘June sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher,’ he added.
The median existing home price for all housing types in June was $236,400, which is 6.5% above June 2014 and surpasses the peak median sales price set in July 2006 of $230,400. June's price increase also marks the 40th consecutive month of year on year gains.
The data also shows that total housing inventory at the end of June inched 0.9% to 2.3 million existing homes available for sale, and is 0.4% higher than a year ago when it was 2.29 million. Unsold inventory is at a five month supply at the current sales pace, down from 5.1 months in May.
‘Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers. Local officials in recent years have rightly authorised permits for new apartment construction, but more needs to be done for condominiums and single family homes,’ Yun explained.
The percent share of first time buyers fell to 30% in June from 32% in May, but remained at or above 30% for the fourth consecutive month. A year ago, first time buyers represented 28% of all buyers.
According to NAR president Chris Polychron, real estate agents are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West. ‘The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price,’ he said.
‘Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they're not optimistic they'll have adequate time to find an affordable property to move into,’ he added.
Distressed sales fell to 8% in June, matching an August 2014 low, from 10% in May, and are below the 11% recorded a year ago. Overall 6% of June sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 15% below market value in June, unchanged from May, while short sales were discounted 18% compared to 16% in May.