Recent days have seen a parade of headlines about rising home prices, soaring mortgage applications and bidding wars. Now, here’s another data point that further shows how real estate is defying the broader economic downturn: Sales of existing homes saw explosive growth in July.
According to data from the National Association of Realtors, out Friday, sales of homes that had been previously owned shot up 24.7 percent compared to June, which itself had seen an increase of 20.7 percent compared to May. Year over year, existing home sales in July were up 8.7 percent.
Prices have seen similar growth. According to NAR’s data, the median U.S. home price in July was $304,100, which is up 8.5 percent from July 2019 when the median price was just $280,400. In its report on the data, NAR further noted that prices “rose in every region” of the U.S.
“July’s national price increase marks 101 straight months of year-over-year gains,” the report adds. “For the first time ever, national median home prices breached the $300,000 level.”
NAR’s report further reveals that homes averaged 22 days on the market in July, down from 24 days in June and 29 days one year ago.
Additionally, real estate professionals will not be surprised to hear that inventory was down. In fact, it was way down. According to the data, there were 1.5 million units of inventory at the end of July, which is a drop of 2.6 percent compared to June and 21.1 percent compared to July of 2019.
In the report, NAR Chief Economist Lawrence Yun noted that inventory is increasing, but new listings “are quickly taken out of the market from heavy buyer competition.” However, the inventory shortage notwithstanding, Yun characterized the overall picture as a positive one for real estate.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” Yun explained. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
To those outside the real estate industry, these booming conditions may seem surprising given that unemployment remains high, the coronavirus pandemic is still going and the economy is far from out of the woods.
But industry insiders have been seeing powerful signs of recovery in their sector for months. All the way back in June, for example, numerous agents shared stories with Inman about being extraordinarily busy. This month, many more agents described mind-bogglingly competitive bidding wars, with would-be buyers in some cases offering hundreds of thousands of dollars over asking price — and still losing.
Though the coronavirus continues to represent an unknown for the future, NAR President Vince Malta framed real estate right now as having a positive impact on the broader economy.
“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” Malta said in the report.