Existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only the Midwest saw an increase in sales last month.
Total existing-home sales1, https://www.nar.realtor/topics/existing-home-sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).
Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June. “Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” he said. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines.”
Added Yun, “The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”
The median existing-home price2 for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600). Last month’s median sales price surpasses May as the new peak and is the 64rd straight month of year-over-year gains.
Total housing inventory3 at the end of June declined 0.5 percent to 1.96 million existing homes available for sale, and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.
First-time buyers were 32 percent of sales in June, which is down from 33 percent both in May and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 20164 – revealed that the annual share of first-time buyers was 35 percent.
“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” said Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”
According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, dipping to 3.90 percent in June from 4.01 percent in May. The average commitment rate for all of 2016 was 3.65 percent.
Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Short sales were on the market the longest at a median of 102 days in June, while foreclosures sold in 57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold in June were on the market for less than a month.
Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in June were Seattle-Tacoma-Bellevue, Wash., 23 days; Salt Lake City, Utah, 26 days; San Jose-Sunnyvale-Santa Clara, Calif., 27 days; San Francisco-Oakland-Hayward, Calif., 29 days; and Denver-Aurora-Lakewood, Colo., at 30 days.
“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown, a Realtor® from Alamo, California. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”
All-cash sales were 18 percent of transactions in June, down from 22 percent both in May and a year ago, and the lowest since June 2009 (13 percent). Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.
Distressed sales5 – foreclosures and short sales – were 4 percent of sales in June, down from both May (5 percent) and a year ago (6 percent) and matching last September as the lowest share since NAR began tracking in October 2008. Three percent of June sales were foreclosures and 1 percent were short sales.
Single-family and Condo/Co-op Sales
Single-family home sales dipped 2.0 percent to a seasonally adjusted annual rate of 4.88 million in June from 4.98 million in May, but are still 0.6 percent above the 4.85 million pace a year ago. The median existing single-family home price was $266,200 in June, up 6.6 percent from June 2016.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 640,000 units in June (unchanged from May), and are 1.6 percent higher than a year ago. The median existing condo price was $245,900 in June, which is 6.5 percent above a year ago.
June existing-home sales in the Northeast fell 2.6 percent to an annual rate of 760,000, but are still 1.3 percent above a year ago. The median price in the Northeast was $296,300, which is 4.1 percent above June 2016.
In the Midwest, existing-home sales rose 3.1 percent to an annual rate of 1.32 million in June (unchanged from June 2016). The median price in the Midwest was $213,000, up 7.7 percent from a year ago.
Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.
Existing-home sales in the West declined 0.8 percent to an annual rate of 1.21 million in June, but remain 2.5 percent above a year ago. The median price in the West was $378,100, up 7.4 percent from June 2016.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.