Home/Mortgages/Existing Home Sales Bounce Back, Prices Fall

August 23, 2012 (Chris Moore)

Completed transactions of existing home purchases rebounded in July after declining for the previous two months according to the National Association of Realtors® (NAR), as tight inventory supply continues to hinder buyer’s choices.

Monthly existing home sales, which include single-family homes, townhomes, condos, and co-ops, increased to a seasonally adjusted rate of 4.47 million transactions in July, up from 4.37 million in June, a gain of 2.3 percent. Compared to July of last year, sales were 10.4 percent higher than the 4.05 million seasonally adjusted transactions. It was the 13th consecutive month that year-over-year home sales have increased.

Lawrence Yun, chief economist of NAR, stated, “Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand. However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”

Regional Home Sales:

Monthly existing home sales in the Northeast increased by 7.4 percent to an annual rate of 580,000 transactions and were 13.7 percent higher than in July of last year, while in the Midwest, sales moved 1.9 percent higher than the previous month, selling at a rate of 1.04 million annual sales, and were 16.9 percent higher than last year’s sales pace.

In the South, monthly existing home sales improved by 2.3 percent in July at an annual pace of 1.77 million transactions and were 8.6 percent above July 2011’s levels, and in the West, transactions for the month were unchanged from an annual rate of 1.08 million sales but were 5.9 percent higher than last year’s sales pace.

Home Prices:

Monthly home prices declined 1.1 percent as the national median existing home price fell from $189,400 in June to $187,300 in July. The median home price in July was 9.4 percent higher than in the same month last year, the fifth consecutive month that home prices have surpassed the previous year’s levels.

The median price in the Northeast was $254,200, which was 3.5 percent higher than a year ago and up from $253,700 last month, while the median price in the Midwest was $154,100, up 5.8 percent from July of 2011 but down from $157,600 the previous month.

In the South, the median price was $162,600, a gain of 6.6 percent from a year ago but down from $165,000 last month, and in the West, the median price was $238,600, up 24.5 percent from July of 2011 and up from $233,300 the previous month.

Cash and Distressed Property Sales:

Distressed property sales accounted for 24 percent of all existing home sales in July, down from 25 percent in June and down from 29 percent in July of 2011. Foreclosure sales made up 12 percent of all existing home sales while short sales also accounted for 12 percent of all existing sales.

Cash sales accounted for 27 percent of all sales in July, down from 29 percent in June, while investors jumped in and purchased 16 percent of the homes sold in July, down from 19 percent in June.

Housing Inventory:

The number of homes available for sale in July increased 1.3 percent to 2.40 million homes which represents a 6.4 month supply, down from a 6.5 months supply in June. The number homes listed for sale in July was 23.8 percent lower than in July of last year.

Tags: existing home sales, investors, distressed property sales, declining prices, low appraisals, cancelled contracts, median home price