Steady job growth and relatively low mortgage rates have convinced current homeowners to purchase homes, while first-time buyers remain scarce.
Meanwhile, the percentage of young adults living with their parents increased in 2015, according to a new analysis by the Terner Center for Housing Innovation at the University of California, Berkeley.
According to the NAR, the national median existing home price for all housing types in July was $234,000, up 5.6% compared with July 2014, the 41st consecutive month of rising home prices. “Realtors® in some markets reported slower foot traffic in July in part because of low inventory and concerns about the continued rise in home prices without commensurate income gains”. The sales are now 11.0 percent above the 4.47 million pace a year ago.
At the heated sales pace, the limited homes for sale represented a 4.8-month supply, a tick higher than in June and helping to push prices higher. First-time buyers in July lowered to 28 percent from 30 percent in June, the lowest share since January of this year which was 28 percent. The median first-time buyer is renting longer and spending more money to purchase their homes, according to the real estate firm Zillow. Will the specter of higher rates spur a frenzy of activity while rates are still low or scare still-timid first-timers away? This is largely due to the economy adding a solid 2.9 million jobs over the past 12 months and the average, 30-year fixed mortgage rate staying around 4 percent.
All homes were on the market for an average of just 42 days. Non-distressed homes took 41 days to sell, and 43% of homes sold in July were on the market for less than a month.
All-cash sales, usually made by investors, increased slightly to 23 percent of transactions in July from 22 percent in June. Sixty-four% of investors paid cash in July.
June’s sales were revised down to 5.48 million, NAR said. Five percent of July sales were foreclosures and 2 percent were short sales.
Foreclosures and short sales declined to 7 percent in July from 8 percent in June.
Total listings continue to reflect tight inventory in the housing market, which has a 3.8 months’ supply of listings based on July’s resale rate, the board reported. The sales have now increased year-over-year for 10 straight months and are 10.3 percent above a year ago.
Sales of previously owned homes, which are completed transactions, rose 2 percent to a seasonally adjusted annual rate of 5.59 million in July, maintaining their fastest pace since February 2007, up from 5.48 million in June, the National Association of Realtors (NAR) said Thursday. The median existing single-family home price was $235,500 in July, up 5.8 percent from July 2014. Sales of multifamily homes decreased by 3.1% year over year to an annual rate of 630,000 units. The median existing condo price was $221,800 in July, which is 3.2% above a year ago.
But on the flip side, sustained price growth combined with a glut of interested buyers could spur more owners who had been waiting to list their homes in the coming months, says Mark Fleming, chief economist at First American, a home insurance provider.