U.S. home prices are up 4.5% in the year to July, the latest data shows.
The median existing-home price for all housing types in July was $269,600. It is the 77th straight month of year-over-year gains, according to National Association of Realtors® figures.
Existing-home sales fell for the fourth straight month in July to their slowest pace in over two years.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – fell 0.7%. They reached a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5% below a year ago.
U.S. home prices are up 4.5% in the year to July
NAR chief economist, Lawrence Yun, says the continuous solid gains in home prices have steadily reduced demand. “Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million.
“Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market.”
Total housing inventory at the end of July was down 0.5% to 1.92 million existing homes available for sale. This is unchanged from a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, also unchanged from a year ago.
Properties typically stayed on the market for 27 days in July. This is up from 26 days in June but down from 30 days a year ago. More than half (55%) of homes sold in July were on the market for less than a month.
“Listings continue to go under contract in under a month, which highlights the feedback from Realtors that buyers are swiftly snatching up moderately-priced properties,” says Mr Yun. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
Demand strongest at entry-level
Rising mortgage rates earlier have had a cooling effect on home sales,” said Yun. “This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”
First-time buyers made up 32% of sales in July, 1% more than June by 1% down from a year ago.
“Despite first-time buyers struggling to achieve homeownership, Realtors in most areas say demand is still the strongest at the entry-level segment of the market,” says NAR President Elizabeth Mendenhall.
“For prospective first-timers looking to begin their home search this fall, it is expected that competition will remain swift.”
All-cash sales up from year ago
All-cash sales were 20% of transactions in July, down from 22% in June but up from 19% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in July (unchanged from last month and a year ago).
Single-family home sales declined 0.2% to a seasonally adjusted annual rate of 4.75 million in July from 4.76 million in June. They are 1.2% below the 4.81 million sales a year ago. The median existing single-family home price was $272,300 in July, up 4.6 percent from July 2017.
Existing condominium and co-op sales fell 4.8% to a seasonally adjusted annual rate of 590,000 in July and are 3.3% below a year ago. The median existing condo price was $248,100 in July, which is 3.2% above a year ago.
The median price in the South was $233,400, up 2.7% from a year ago.