Existing homes sales rise for second straight month in July

Key Highlights

• Existing-home sales rose 2% on a seasonally adjusted annual rate from June to July, with no sales declines showing in any regions.
• The inventory of unsold homes increased 7.3% to 1.32 million from June to July – equivalent to 2.6 months of the monthly sales pace.
• The median existing-home sales price rose at a year-over-year pace of 17.8%.

Existing-home sales rose in July, marking two consecutive months of increases, according to the National Association of Realtors^®. Three of the four major U.S. regions recorded modest month-over-month gains, and the fourth remained level. Figures varied from a year-over-year perspective as two regions saw gains, one witnessed a decline and one was unchanged.

Total existing-home sales,¹ https://www.nar.realtor/existing-home-sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020).

“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, NAR’s chief economist. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”

Total housing inventory² at the end of July totaled 1.32 million units, up 7.3% from June’s supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020.

The median existing-home price³ for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb. This marks 113 straight months of year-over-year gains.

“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” said Yun.

“In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates,” he added.

Properties typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020. Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.

First-time buyers accounted for 30% of sales in July, down from 31% in June and down from 34% in July 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 2020⁴ – revealed that the annual share of first-time buyers was 31%.

Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from 14% in June but even with 15% from July 2020. All-cash sales accounted for 23% of transactions in July, even with June and up from 16% in July 2020.

Distressed sales⁵ – foreclosures and short sales – represented less than 1% of sales in July, equal to the percentage seen a month prior and equal to July 2020.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.87% in July, marginally down from 2.98% in June. The average commitment rate across all of 2020 was 3.11%.

Single-family and Condo/Co-op Sales

Single-family home sales increased to a seasonally adjusted annual rate of 5.28 million in July, up 2.7% from 5.14 million in June and down 0.8% from one year ago. The median existing single-family home price was $367,000 in July, up 18.6% from July 2020.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 710,000 units in July, down from 730,000 in June and up 22.4% from one year ago. The median existing condo price was $307,100 in July, an annual increase of 14.1%.

“As more homes come on the market, opportunities for prospective buyers continue to increase in regions across the country,” said NAR President Charlie Oppler, a Realtor^® from Franklin Lakes, N.J., and the CEO of Prominent Properties Sotheby’s International Realty. “But even though we are beginning to see some normalcy return, NAR continues to work alongside legislators and policymakers to ensure we are doing everything we can to boost the supply of safe, affordable housing in America.”

Regional Breakdown

Existing-home sales in the Northeast remained steady in July, registering an annual rate of 740,000 for the second straight month, a 12.1% rise from July 2020. The median price in the Northeast was $411,200, up 23.6% from one year ago.

Existing-home sales in the Midwest rose 3.8% to an annual rate of 1,380,000 in July, a 1.4% decline from a year ago. The median price in the Midwest was $275,300, a 13.1% increase from July 2020.

Existing-home sales in the South rose 1.2% in July, recording an annual rate of 2,630,000, up 1.2% from the same time one year ago. The median price in the South was $305,200, a 14.4% jump from one year ago.

Existing-home sales in the West grew 3.3%, posting an annual rate of 1,240,000 in July, equal to the level of a year ago. The median price in the West was $508,300, up 12.5% from July 2020.