A record rebound for existing-home sales
After three consecutive months of declines caused by the ongoing pandemic, existing-home sales increased 20.7 percent in June to a seasonally adjusted annual rate of 4.72 million, though year-over-year sales were still down 11.3 percent.
“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” explains NAR’s chief economist, Lawrence Yun. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
The median existing-home price in June was $295,300—up 3.5 percent from last year—with home prices increasing in every region, marking the 100th straight month of year-over-year gains. And while total housing inventory was up 1.3 percent in June, it was still 18.2 percent lower than last year, further solidifying an already competitive market.
The domino effect of low inventory
Yun, who has continually voiced concerns over a growing lack of inventory, cautions about the potential for inflated costs. “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
NAR’s recently released 2020 Member Profile emphasizes his concern, with Realtors® pointing to low inventory as one of the top hindrances for potential buyers.
With 62 percent of homes sold in June on the market for less than a month, properties typically remained on the market for 24 days, down from 26 days in May and 27 days in June of last year.
Bouncing back for economic recovery
“It’s inspiring to see Realtors® absorb the shock and unprecedented challenges of the virus-induced shutdowns and bounce back in this manner,” said NAR President Vince Malta. “NAR and our 1.4 million members will continue to tirelessly work to facilitate our nation’s economic recovery as we all adjust to this new normal.”
Rates remain low, as Freddie Mac reports the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.16 percent in June, down from 3.23 percent in May. For context, the average commitment rate for 2019 was 3.94 percent.
Single-family home sales were up 19.9 percent in June, but down 9.9 percent from last year, while existing condominium and co-op sales were up 29.4 percent in June, but down 22.8 percent from last year. This suggests that there may be more interest in single-family homes than condos compared to this time last year.
“Homebuyers considering a move to the suburbs is a growing possibility after a decade of urban downtown revival,” says Yun. “Greater work-from-home options and flexibility will likely remain beyond the virus and any forthcoming vaccine.”
Growth across the regions
All four regions experienced month-over-month growth in sales, though year-to-year numbers were down across the board.
June existing-home sales:
- Northeast: up 4.3% to an annual rate of 490,000—27.9% lower than last year
- Midwest: up 11.1% to an annual rate of 1,100,000—13.4% lower than last year
- South: up 26.0% to an annual rate of 2.18 million—4.0% lower than last year
- West: up 31.9% to an annual rate of 950,000—13.6% lower than last year