Luxury home sales rose in July, while entry-level buyers pulled back, according to the National Association of Realtors.
Existing-home sales cooled in July, but the market split by price tier — million-dollar-plus properties kept climbing while sales under $250,000 continued to decline.
Existing-home sales fell 1.7 percent month-over-month to a seasonally adjusted annual rate of 4.06 million in July, up 0.7 percent from one year earlier, NAR reported. Year-to-date sales are up 2.4 percent.
Luxury sales climb as wealth concentrates at the top
Lawrence Yun
The divide was clearest at the top of the market. Home sales of $1 million or more rose 15 percent from a year ago, Lawrence Yun, NAR’s chief economist, said on a call.
“The top end of the market [is] continuing to improve, while the lower segment of society [is] clearly showing frustration with the economic conditions overall, and also home sales; home sales actually lowered[, with] fewer home sales on anything below the $250,000 category,” Yun said.
Yun attributed the split to wealth concentrated among higher-income buyers, pointing to stock market gains and rising home equity as drivers at the top of the market.
“Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months,” Yun said in a statement. “Year-to-date sales are up 2.4 percent, and there’s no doubt that the housing market would be thriving if average mortgage rates were to return near 6 percent.”
1st-time buyers keep losing ground
First-time buyers made up 29 percent of July transactions, down from 33 percent in June, according to NAR’s monthly confidence survey of Realtors. Yun said that figure needs to climb closer to 40 percent for a healthy market.
Investors and second-home buyers accounted for 14 percent of transactions in July, down from 20 percent a year earlier, per the same survey.
Agents are the ones absorbing the disconnect
Mary Lee Blaylock
Mary Lee Blaylock, president of Coldwell Banker Affiliates, said in a statement that the data reflects “a disconnect with both buyers and sellers right now.” She said sellers are adjusting to a slower pace of sales after years of quick turnarounds, making accurate pricing critical.
For agents working the top of the market, the data shows continued momentum among move-up and luxury buyers. For those focused on entry-level clients, affordability and mortgage rates, still above 6.5 percent, remain the primary obstacles keeping first-time buyers on the sidelines.
