Strong buyer demand has been consistent as has resulted in homes going under agreement in less than one month for the fourth month in a row this July. There were ups and downs in sales across the United States this summer due to slim housing stock, but overall a slight decrease in the numbers.
In particular, total existing home sales of completed sales transactions had seen a small decrease by 1.3% in July. However, this sales trend was still 2.1% higher than this time last year.
Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
Regarding home prices, the median price for existing homes in July was up by 6.2% over last year. This was the 65th consecutive month of year-over-year gains. By contrast, housing inventory has continued to be on the decline for the past 26 year-over-year consecutive months which has caused the current inventory challenges.
“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
Lack of inventory is one of the primary reasons that most homes are not spending much time on the market these days. In July, 51% of the homes that were sold that month were on the market for less than a month.
“July was the fourth consecutive month that the typical listing went under contract in under one month,” said Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”
In numerous real estate markets across the U.S. like Boston, the fall market is most often a busy market when sales can surge much like spring. It is forecasted that inventory levels should increase as sellers seek to take advantage of the selling season.