The inventory of resale homes jumped to 9.6 months in July, as the sales rate for that month dropped 9 percent compared to the same month last year, the National Association of Realtors reported today.
A for-sale inventory greater than six months is generally considered to indicate a buyer’s market — this statistic indicates the length of time it will take to deplete the for-sale inventory at the current sales pace. The existing-home inventory has climbed 31.5 percent since July 2006, when there was a 7.3-month supply.
The inventory of single-family resale homes was 9.2 months in July while the inventory of condominiums and cooperatives rose to 11.9 months.
The last time that the resale single-family inventory had reached this level was in October 1991, when it was 9.3 months, said association spokesman Walt Molony.
The inventory was 4.3 months for the full year in 2004, 4.5 months in 2005 and 6.5 months in 2006, the association reported.
The seasonally adjusted annual rate of existing-home sales reached 5.75 million in July, compared with 5.76 million in June and 6.32 million in July 2006, the trade group reported. It was the lowest monthly sales rate since November 2002.
This rate is a projection of a monthly sales total over a 12-month period, adjusted for seasonal fluctuations in sales activity.
The median sales price of existing homes was $228,900 in July, down 0.6 percent from $230,200 in July 2006. And the average price of resale homes increased 0.2 percent in July to $276,000, compared to $275,400 in July 2006.
Regionally, existing-home sales fell 15.2 percent in the West, 10.7 percent in the South, 5.6 percent in the Midwest and 2.9 percent in the Northeast in July compared to the same month last year.
The median sales price of existing homes dropped 3.2 percent in the South and 1.8 percent in the Midwest in July while rising 5.9 percent in the Northeast and 0.9 percent in the West in July compared to July 2006.
Existing-home sales in the Northeast increased 1 percent to a level of 1.02 million in July, but are 2.9 percent lower than July 2006. The median existing-home price in the Northeast was $290,900, up 5.9 percent from a year ago.
Existing-home sales in the South were unchanged from June at an annual rate of 2.26 million in July, but are 10.7 percent below a year ago. The median price in the South was $186,300, down 3.2 percent from July 2006.
Existing-home sales in the Midwest fell 2.2 percent in July to a level of 1.35 million, and are 5.6 percent below July 2006. The median price in the Midwest was $173,800, which is 1.8 percent below a year ago.
The rate of single-family home sales dropped 9.3 percent to a seasonally adjusted annual rate of 5 million in July compared to July 2006, and the median existing single-family home price was $228,600 in July, down 1 percent from July 2006.
Meanwhile, the rate of existing condo and co-op sales fell 7.5 percent to 750,000 year-over-year in July while the median existing-condo price was $230,600 in July, up 2.4 percent from July 2006.
Senior NAR economist Lawrence Yun said in a statement that “mortgage liquidity issues of the past two months” have slowed sales. “Some buyers with contracts have been scrambling when loan commitments did not materialize at the last moment, while other potential buyers are simply waiting for the mortgage market to stabilize.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.7 percent in July, up from 6.66 percent in June — the rate was 6.76 percent in July 2006. Last week, Freddie Mac reported that the 30-year fixed rate dropped to 6.52 percent, according to the NAR report.