Existing home sales in U.S. rise in July
U.S. existing home sales increased for the second-consecutive month in July as inventories improved moderately, while prices eased from the prior month’s record level.
Existing home sales increased 2.0 per cent to a seasonally adjusted annual rate of 5.99 million units last month from June’s upwardly revised pace of 5.87 million units, the National Association of Realtors said on Monday. Sales were unchanged in the Northeast, but increased in the Midwest, South and the West.
Economists polled by Reuters had forecast sales would decline to a rate of 5.83 million units in July.
Home resales, which account for the bulk of U.S. home sales, increased 1.5 per cent on a year-on-year basis. The median sales price slipped to US$359,900 from June’s record level, but was still up 17.8 per cent from the year-earlier period.
The sales rate increase suggests the drop-off in sales after a sharp run-up late in 2020 and early this year may have run its course.
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” Lawrence Yun, NAR’S chief economist, said in a 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.”
Homebuilding fell more than expected in July amid supply constraints, the Commerce Department reported last week, as surging construction costs and home prices continued to constrain the housing market. There was, however, a rebound in building permits following three-consecutive months of declines.
Demand for housing soared throughout the coronavirus pandemic. Since then, the combination of robust demand and record-low mortgage rates have far outpaced supply. This has also made it harder for potential homebuyers to enter the market.
For example, a report from the Mortgage Bankers Association last week showed that applications for loans to purchase a house declined in the week ending Aug. 13.