Home Sales Up as First-Time Buyers Re-Emerge
July 21, 2016
First-time home buyers flooded the market last month, reaching their greatest share in nearly four years, according to NAR’s latest housing report. Existing-home sales climbed across the country in June, except for the Northeast, as the summer continued to see high demand.
Here are how existing-home sales fared across the country in June:
- Northeast: existing-home sales dropped 1.3 percent to an annual rate of 760,000, but remain 5.6 percent higher than a year ago. Median price: $284,800, which is 1.4 percent above a year ago.
- Midwest: existing-home sales climbed 3.8 percent to an annual rate of 1.35 million and are now 4.7 percent higher than a year ago. Median price: $199,900, up 5.7 percent from a year ago.
- South: existing-home sales remained unchanged from May at an annual rate of 2.26 million in June, yet are up 3.2 percent above a year ago. Median price: $217,400, up 5.5 percent from a year ago.
- West: existing-home sales increased 1.7 percent to an annual rate of 1.20 million in June, but are still 0.8 percent below a year ago. Median price: $350,800, which is 7.2 percent above a year ago.
Source: National Association of REALTORS®
Existing-home sales rose 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June, NAR reported. Sales are now up 3 percent compared to a year ago and are at the highest annual pace since February 2007.
“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” says Lawrence Yun, NAR’s chief economist. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.”
That said, Yun cautions whether the current sales pace can stretch much higher amid a still very limited number of homes for sale and rising home prices.
First-Time Buyer Rebound
First-time buyers comprised 33 percent of the market last month, the highest level since July 2012 (34 percent at the time), NAR reports.
“The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market,” says Yun. “The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply – particularly areas in the Midwest and parts of the South.”
5 Stats to Gauge the Market
Here is an overview of more key indicators from NAR’s latest housing report:
1. Prices: Median-existing-home prices for all housing types in June was $247,700, increasing 4.8 percent from a year ago. June’s median price surpasses May’s peak median sales price of $238,900.
2. Housing inventory: Unsold inventory is at a 4.6-month supply at the current sales pace, down from 4.7-months in May. Total housing inventory last month dropped 0.9 percent to 2.12 million existing homes available for sale. Inventory is 5.8 percent lower than a year ago.
3. Days on the market: Forty-eight percent of homes sold in June were on the market for less than a month. Properties, on average, stayed on the market for 34 days in June, unchanged from a year ago. Short sales were on the market the longest amount of time at a median of 156 days; foreclosures sold in 49 days; and non-distressed homes sold in 30 days.
4. Distressed sales: Foreclosures and short sales accounted for 6 percent of sales in June, down from 8 percent a year ago. In June, four percent of June sales were foreclosures, and 2 percent were short sales. Foreclosures sold, on average, for a discount of 11 percent below market value; short sales were discounted on average 18 percent.
5. All-cash sales: All-cash sales comprised 22 percent of transactions in June, unchanged from a year ago. Individual investors, who account for a bulk of cash sales, purchased 11 percent of homes in June, the lowest share since July 2009.
Updated: November 12, 2018