Existing-home sales rose 2 percent on a seasonally adjusted annual basis from the previous month in July 2021, marking the second consecutive month in which sales increased, according to the National Association of Realtors (NAR). Total existing-home sales of single-family homes, townhomes, condos and co-ops hit a rate of 5.99 million, up 1.5 percent from 5.90 million in July 2020.
All major geographical regions either stayed steady or increased month over month. Just one region saw existing-home sales decline year over year.
Single-family home sales rose 2.7 percent from June to a seasonally adjusted annual rate of 5.28 million in July, which was down 0.8 percent from July 2020. Condo and co-op sales were down from 730,000 units in June to 710,000 units in July, but sales were still up 22.4 percent from the year before.
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” Lawrence Yun, NAR’s chief economist, said in a press statement. “Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
Meanwhile, total inventory was up 7.3 percent from June to 1.32 million units, but down 12 percent from the year before. That figure places current inventory levels at 2.6 months of supply. In June, there were 2.5 months of housing supply, and in July 2020, 3.1 months.
The median existing-home price also continued to rise year over year, hitting $359,900 in July 2021, up 17.8 percent from $305,600 in July 2020. The median existing single-family home price was up 18.6 percent from the year before to $367,000. Condos also showed significant price gains year over year, hitting a median price of $307,100 in July 2021, up 14.1 percent from the previous year.
However, Yun said prices will likely see slowed growth soon as inventory levels continue to increase.
“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” Yun said. “In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates.”
Days on market in July remained steady from June at 17 days. Nearly 90 percent of homes sold during July were on the market for less than one month.
The number of first-time homebuyers making up sales declined slightly, from 31 percent in June to 31 percent in July. That number was also down from 34 percent in July 2020.
All-cash sales, at 23 percent of sales, made up nearly one-quarter of all transactions in July, which remained unchanged from June, but was up from 16 percent in July 2020.
Foreclosures and distressed sales made up less than 1 percent of sales in July, the same percentage seen both in June 2021 and July 2020.
Existing-home sales in the Midwest grew by the greatest margin from the previous month, increasing by 3.8 percent to an annual rate of 1,380,000. Year over year, home sales in the region declined by 1.4 percent, however, and the median price was $275,300, up 13.1 percent from the year before.
In the West, existing-home sales increased 3.3 percent to an annual rate of 1,240,000, the same figure as the previous year. The median price was up 12.5 percent from the previous year to $508,300.
Existing-home sales rose 1.2 percent in the South, reaching an annual rate of 2,630,000, also up 1.2 percent from July 2020. The median price in the region rose 14.4 percent from the previous year to $305,200.
Existing-home sales in the Northeast remained flat at an annual rate of 740,000, up 12.1 percent from July 2020. The median price surge 23.6 percent year over year in the region to $411,200.
Danielle Hale, chief economist at realtor.com, noted in a statement emailed to Inman that economic recovery needs to remain stable in order for sales to continue their growth in future months.
“Continued economic recovery is key to maintaining sales momentum, and anything that disrupts progress, such as rising COVID cases, could knock home sales off course,” Hale said. “We’ve already seen a pullback in builder confidence and mixed construction data as builders balance buyer interest with supply challenges, rising costs and concerns about the future of the economy and housing affordability. Still, with listing price growth beginning to recalibrate in response to shifting supply and demand dynamics, we should see a steady pace of home sales over the next few months, especially if mortgage rates remain low.”