June Existing-Home Sales Slip but Prices Continue to Roll
at Double-Digit Rates
(July 22, 2013) – Existing-home sales declined in June but have stayed well above year-ago levels for the past two years, while the median price shows seven straight months of double-digit year-over-year increases, according to the National Association of Realtors®.
Total existing-home sales1, which are completed transactions that include single-family homes,
townhomes, condominiums and co-ops, dipped 1.2 percent to a seasonally adjusted
annual rate of 5.08 million in June from a downwardly revised 5.14 million in
May, but are 15.2 percent higher than the 4.41 million-unit level in June 2012.
Bill Lawton, 2013 President of The Greater Greenville
Association of REALTORS® and Broker-in-Charge at Keller Williams Realty in
Greenville, SC, said there is enough momentum in the market, even with higher
interest rates. “Affordability conditions remain favorable in most of the
country, and we’re still dealing with a large pent-up demand,” he said.
“However, higher mortgage interest rates will bite into high-cost regions of
California, Hawaii and the New York City metro area market.”
According to
Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate
mortgage rose to 4.07 percent in June from 3.54 percent in May, and is the
highest since October 2011 when it was also 4.07 percent; the rate was 3.68
percent in June 2012.
Total housing
inventory at the end of June rose 1.9 percent to 2.19 million existing homes
available for sale, which represents a 5.2-month supply2 at the
current sales pace, up from 5.0 months in May. Listed inventory remains
7.6 percent below a year ago, when there was a 6.4-month supply.
“Inventory conditions will continue to broadly favor sellers and contribute to
above-normal price growth,” Yun remarked.
The national
median existing-home price3 for all housing types was $214,200 in
June, up 13.5 percent from June 2012. This marks 16 consecutive months of
year-over-year price increases, which last occurred from February 2005 to May
2006.
Distressed homes4
– foreclosures and short sales – were 15 percent of June sales, down from 18
percent in May, and are the lowest share since monthly tracking began in
October 2008; they were 26 percent in June 2012. The decline in sales of
distressed homes, which typically sell at a reduced price, accounts for some of
the price growth.
Eight percent of
June sales were foreclosures, and 7 percent were short sales.
Foreclosures sold for an average discount of 16 percent below market value in
June, while short sales were discounted 13 percent.
Lawton said some
owners who were hurt by the downturn are now in the market. “Rising
values have improved the position of homeowners, and 16 percent of Realtors®
surveyed in June report they worked with a client that previously had an
underwater mortgage,” he said.
“Of those
previously underwater owners, 53 percent were planning to buy another home and
22 percent intend to rent, but 25 percent weren’t sure what they’d do. In
addition, 47 percent of Realtors® report they have potential sellers
who are waiting for additional price appreciation before they sell,” Lawton
said.
The median time on market for all homes was 37 days in June, down from 41 days in May, and is 47 percent faster than the 70 days on market in June 2012. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days. Forty-seven percent of all homes sold in June were on the market for less than a month.
First-time buyers
accounted for 29 percent of purchases in June, compared with 28 percent in May
and 32 percent in June 2012. “First-time buyers should be closer to 40
percent of the market, but they’re held back by the frictions of tight credit
and very limited inventory in the lower price ranges in most of the U.S.,” says
Lawton.
All-cash sales
made up 31 percent of transactions in June, down from 33 percent in May; they
were 29 percent in June 2012. Individual investors, who account for many
cash sales, purchased 17 percent of homes in June, down from 18 percent in May
and 19 percent in June 2012.
Single-family
home sales slipped 1.1 percent to a seasonally adjusted annual rate of 4.50
million in June from 4.55 million in May, but are 14.5 percent above the 3.93
million-unit pace in June 2012. The median existing single-family home
price was $214,700 in June, which is 13.2 percent above a year ago.
Existing
condominium and co-op sales fell 1.7 percent to an annualized rate of 580,000
units in June from 590,000 in May, but are 20.8 percent higher than the
480,000-unit level a year ago. The median existing condo price was
$210,200 in June, up 15.4 percent from June 2012.
Regionally,
existing-home sales in the Northeast declined 1.6 percent to an annual rate of
630,000 in June but are 16.7 percent above June 2012. The median price in
the Northeast was $270,400, which is 6.8 percent above a year ago.
Existing-home
sales in the Midwest were unchanged in June at a pace of 1.21 million, and are
17.5 percent higher than a year ago. The median price in the Midwest was
$170,100, up 8.9 percent from June 2012.
In the South,
existing-home sales slipped 1.5 percent to an annual level of 2.03 million in
June but are 16.0 percent above June 2012. The median price in the South
was $186,300, which is 13.7 percent above a year ago.
Existing-home
sales in the West declined 1.6 percent to a pace of 1.21 million in June but
are 11.0 percent above a year ago. With ongoing supply constraints, the
median price in the West was $282,000, a jump of 19.9 percent from June 2012.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
Greater Greenville Association of REALTORS® represents over
1,600 members in all aspects of the real estate industry. Please visit the Greater Greenville
Association of REALTORS® web site at www.ggar.com for real estate and consumer
information.
“Every market is different, call a REALTOR® today.”
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