U.S. home sales rose a record amount month-to-month in June, NAR says – but part of the reason is because May sales fell dramatically in the early days of the pandemic.
WASHINGTON – Existing-home sales rebounded at a record pace in June, according to the National Association of Realtors® (NAR) June housing report. NAR calls it “strong signs of a market turnaround after three straight months of sales declines caused by the ongoing pandemic. Each of the four major regions tracked in the report saw month-over-month growth.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – jumped 20.7% from May to a seasonally-adjusted annual rate of 4.72 million in June.
However, sales overall dipped 11.3% year-to-year (5.32 million in June 2019).
“The sales recovery is strong as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” says Lawrence Yun, NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The median existing-home price for all housing types in June was $295,300, up 3.5% year-to-year. June’s national price increase marks 100 straight months of year-over-year gains.
Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May – but that’s still down 18.2% from one year ago (1.92 million). There’s a 4.0-month supply of unsold inventory at the current sales pace, down from 4.8 months last month and 4.3 months one year earlier.
Yun says significantly low inventory was a problem even before the pandemic, and a lack of for-sale homes can lead to inflated costs, nothing “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
In NAR’s recently released 2020 Member Profile, Realtors said low inventory was one of the top hindrances for potential buyers.
Properties typically remained on the market for 24 days in June, seasonally down from 26 days in May and down from 27 days in June 2019. Of all June sales, 62% were on the market for less than a month.
First-time buyers made up 35% of June’s sales, up from 34% in May 2020 and about equal to 35% in June 2019.
Individual investors or second-home buyers, who account for many cash sales, purchased 9% of homes in June, down from 14% in May 2020 and 10% in June 2019. All-cash sales accounted for 16% of transactions in June, down from 17% in May 2020 and about equal to 16% in June 2019.
Distressed sales – foreclosures and short sales – represented 3% of sales in June, which is roughly the same month-to-month but up from 2% one year earlier.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.16% in June, down from 3.23% in May. The average commitment rate across all of 2019 was 3.94%.
Single-family and condo/co-op sales: Single-family home sales were at a seasonally adjusted annual rate of 4.28 million in June, up 19.9% from 3.57 million in May and down 9.9% from one year ago. The median existing single-family home price was $298,600 in June, up 3.5% from June 2019.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 440,000 units in June, up 29.4% from May and down 22.8% year-to-year. The median existing condo price was $262,700 in June, a 1.4% increase from a year ago.
“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival,” Yun says. “Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”
Regional breakdown: In a reversal from last month, June sales increased in every region, as did median home prices.
In the Northeast, existing sales rose 4.3%, recording an annual rate of 490,000 – a 27.9% decrease year-to-year. The median price in the Northeast was $332,900, up 3.6% from June 2019.
Existing-home sales increased 11.1% in the Midwest to an annual rate of 1,100,000 in June, down 13.4% from a year ago. The median price in the Midwest was $236,900, a 3.2% increase from June 2019.
In the South, existing-home sales jumped 26.0% to an annual rate of 2.18 million, down 4.0% from the same time one year ago. The median price in the South was $258,500, a 4.4% increase from a year ago.
Existing-home sales in the West rose 31.9% to an annual rate of 950,000 – a 13.6% decline from a year ago. The median price in the West was $432,600, up 5.4% from June 2019.
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