Sales of existing homes fell 1.8% to a seasonally adjusted annual rate of 5.52 million in June, the National Association of Realtors reported Monday. The pace, however, remained 0.7% ahead of June, 2016 but was the second lowest of 2017.
The Realtor group attributed the decline to low supply that kept homes selling at a near record pace but ultimately ended up muting overall activity. Only the Midwest saw an increase in sales last month.
Single-family home sales dipped 2.0% to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6% above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6% from June 2016.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6% higher than a year ago. The median existing condo price was $245,900 in June, 6.5% above a year ago.
June existing-home sales in the Northeast fell 2.6% to an annual rate of 760,000, but are still 1.3% above a year ago. The median price in the Northeast was $296,300, 4.1% above June 2016. In the Midwest, existing-home sales rose 3.1% to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7% from a year ago. Existing-home sales in the South decreased 4.7% to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2% from a year ago. Existing-home sales in the West declined 0.8% to an annual rate of 1.21 million in June, but remain 2.5% above a year ago. The median price in the West was $378,100, up 7.4% from June 2016.
Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
Added Yun, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”
The median existing-home price for all housing types in June was $263,800, up 6.5% from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64th straight month of year-over-year gains.
Total housing inventory3 at the end of June declined 0.5% to 1.96 million existing homes available for sale, and is now 7.1% lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.
First-time buyers were 32% of sales in June, which is down from 33% both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35%.
“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90% in June from 4.01% in May. The average commitment rate for all of 2016 was 3.65%.
Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. 54% of homes sold in June were on the market for less than a month.
Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.
“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown, a Realtor® from Alamo, California. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”
All-cash sales were 18% of transactions in June, down from 22% both in May and a year ago, and the lowest since June 2009 (13%). Individual investors, who account for many cash sales, purchased 13% of homes in June, down from 16% in May and unchanged from a year ago. 56% percent of investors paid in cash in June.
Distressed sales – foreclosures and short sales – were 4% of sales in June, down from both May (5%) and a year ago (6%) and matching last September as the lowest share since NAR began tracking in October 2008. 3% of June sales were foreclosures and 1%were short sales.
Single-family and Condo/Co-op Sales
