Boosted by a greater share of sales to first-time buyers not seen in nearly four years, existing-home sales maintained their upward trajectory in June and increased for the fourth consecutive month, according to the National Association of Realtors. Only the Northeast saw a decline in closings in June, and sales to investors fell to their lowest overall share since July 2009.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.57 million in June from a downwardly revised 5.51 million in May. After last month’s gain, sales are now up 3 percent from June 2015 (5.41 million) and remain at their highest annual pace since February 2007 (5.79 million).
NAR Chief Economist Lawrence Yun says the four-month streak of sales gains through June caps off a solid first half of 2016 for the housing market.
“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” he said in a press release. “Sustained job growth as well as this year’s descent in mortgage rates is undoubtedly driving the appetite for home purchases.
“Looking ahead, it’s unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing,” Yun said.
The median existing-home price for all housing types in June was $247,700, up 4.8 percent from June 2015 ($236,300). June’s price increase marks the 52nd consecutive month of year-over-year gains and surpasses May’s peak median sales price of $238,900.
Total housing inventory at the end of June dipped 0.9 percent to 2.12 million existing homes available for sale, and is now 5.8 percent lower than a year ago (2.25 million). Unsold inventory is at a 4.6-month supply at the current sales pace, which is down from 4.7 months in May.
The share of first-time buyers was 33 percent in June, which is up from 30 percent in May and a year ago and is the highest since July 2012 (34 percent). Through the first six months of the year, first-time buyers have represented an average of 31 percent of buyers; they were 30 percent in all of 2015.
NAR President Tom Salomone says Realtors are thrilled that the Senate last week voted to pass H.R. 3700, the Housing Opportunity Through Modernization Act.
“At a time of historically low mortgage rates, this is a huge win for prospective first-time and low- to moderate-income buyers interested in purchasing a condo,” he said. “Eliminating overly burdensome restrictions on condos will help more of these prospective buyers access financing and take advantage of this affordable entry point into homeownership.”