Existing-home sales were sharply lower in July following expiration of the home buyer tax credit but home prices continued to gain, according to the National Association of EALTORS® www.realtor.org, which are completed transactions that include single-family, townhomes, condominiums,
and co-ops, dropped 27.2 percent to a seasonally adjusted annual rate
of 3.83 million units in July from a downwardly revised 5.26 million in
June, and are 25.5 percent below the 5.14 million-unit level in July
2009. Sales are at the lowest level since the total existing-home sales
series launched in 1999, and single family sales – accounting for the
bulk of transactions – are at the lowest level since May of
1995.www.realtor.org/research/chief_economist Lawrence Yun,NAR chief
economist, said a soft sales pace likely will continue for a few
additional months. “Consumers rationally jumped into the market before
the deadline for the home buyer tax credit expired. Since May, after
the deadline, contract signings have been notably lower and a pause
period for home sales is likely to last through September,” he said.
“However, given the rock-bottom mortgage interest rates
and historically high housing affordability conditions, the pace of a
sales recovery could pick up quickly, provided the economy consistently
adds jobs.“Even with sales pausing for a few months, annual sales are
expected to reach 5 million in 2010 because of healthy activity in the
first half of the year. To place in perspective, annual sales averaged
4.9 million in the past 20 years, and 4.4 million over the past 30
years,” Yun added.
Mortgage Rates Dip According to Freddie Mac,
the www.freddiemac.com/pmms national average commitment rate for a
30-year, conventional, fixed-rate mortgage fell to a record low 4.56
percent in July from 4.74 percent in June; the rate was 5.22 percent in
July 2009. Last week, Freddie Mac reported the 30-year fixed was down
to 4.42 percent.The national median existing-home price for all housing
types was $182,600 in July, up 0.7 percent from a year ago. Distressed
home sales are unchanged from June, accounting for 32 percent of
transactions in July; they were 31 percent in July 2009.
“Thanks
to the home buyer tax credit, home values have been stable for the past
18 months despite heavy job losses,” Yun said. “Over the short term,
high supply in relation to demand clearly favors buyers. However, given
that home values are back in line relative to income, and from very
low new-home construction, there is not likely to be any measurable
change in home prices going forward.
Inventory Rises Total
housing inventory at the end of July increased 2.5 percent to 3.98
million existing homes available for sale, which represents a
12.5-month supply at the current sales pace, up from an 8.9-month supply
in June. Raw unsold inventory is still 12.9 percent below the record
of 4.58 million in July 2008.
NAR President Vicki Cox Golder said
there are great opportunities now for buyers who weren’t able to take
advantage of the tax credit. “Mortgage interest rates are at record
lows, home prices have firmed and there is good selection of property
in most areas, so buyers with good jobs and favorable credit ratings
find themselves in a fortunate position,” she said.
A parallel
NAR practitioner survey shows first-time buyers purchased 38 percent of
homes in July, down from 43 percent in June. Investors accounted for
19 percent of sales in July, up from 13 percent in June; the balance
were to repeat buyers. All-cash sales rose to 30 percent in July from
24 percent in June.
Breakdown of the Numbers
Single-family
home sales dropped 27.1 percent to a seasonally adjusted annual rate
of 3.37 million in July from a pace of 4.62 million in June, and are
25.6 percent below the 4.53 million level in July 2009; they were the
lowest since May 1995 when the sales rate was 3.34 million.
The median existing single-family home price was $183,400 in July, which is 0.9 percent above a year ago.
Single-family
median existing-home prices were higher in 11 out of 19 metropolitan
statistical areas reported in July in comparison with July 2009 (the
price in one of 20 tracked markets was not available). However, existing
single-family home sales fell in all 20 areas from a year ago.
Existing
condominium and co-op sales fell 28.1 percent to a seasonally adjusted
annual rate of 460,000 in July from 640,000 in June, and are 24.0
percent below the 605,000-unit level in July 2009. The median existing
condo price was $176,800 in July, down 1.7 percent from a year ago.
Existing-home
sales in the Northeast dropped 29.5 percent to an annual pace of
620,000 in July and are 30.3 percent lower than a year ago. The median
price in the Northeast was $263,800, up 4.8 percent from July
2009.Existing-home sales in the Midwest fell 35.0 percent in July to a
level of 800,000 and are 33.3 percent below July 2009. The median price
in the Midwest was $151,600, down 2.8 percent from a year ago.In the
South, existing-home sales dropped 22.6 percent to an annual pace of
1.54 million in July and are 19.8 percent below a year ago. The median
price in the South was $156,300, down 3.3 percent from July
2009.Existing-home sales in the West fell 25.0 percent to an annual
level of 870,000 in July and are 23.0 percent below a year ago. The
median price in the West was $224,800, up 3.3 percent from July 2009.
Source: NAR
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