Housing boom May be over as new home sales fall to pandemic low – but too soon to forecast a bubble as Sales Prices Hit Second Highest Pace
The best news of the week about the Real Estate Housing market for investors was delivered on Thursday by NAR – the National Association of Realtors which reported that sales of previously owned homes (USEHS=ECI) rose 1.4% to 5.86 million units in June at a seasonally adjusted annualized rate, although the rebound was weaker than expected.
After four months of decline, sales of existing-homes made a slight comeback with a 1.4% increase in June from the prior month, to 5.86 million.
Compared to one year ago, sales are 22.9% higher. With inflation rising and mortgage rates expected to rise as well, sales are likely to trend below 6 million on an annualized basis for the rest of the year. Sales rose with more inventory coming into the market, aided by an increase in housing construction. The inventory of unsold homes rose to 1.25 million (1.21 million in May), which is equivalent to 2.6 months of the monthly sales’ pace (2.5 months in May). While inventory of homes for sales are rising, the number of homes on the market is still 18.8% below the level one year ago.
Key Highlights from NAR
- Existing-home sales rose 1.4% on a seasonally adjusted annual rate from May to June, with no region showing a sales decline.
- The inventory of unsold homes increased 3.3% to 1.25 million from May to June – equivalent to 2.6 months of the monthly sales pace.
- The median existing-home sales price rose at a year-over-year pace of 23.4%, the second highest level recorded since January 1999. Homes on the market typically sold in 17 days.
Existing-home sales increased in June, snapping four consecutive months of declines, according to the National Association of Realtors®. Three of the four major U.S. regions registered small month-over-month sales gains, while the fourth remained flat. However, all four areas notched double-digit home sales year-over-year gains.
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 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020).
