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Takeaways:
- The 2015 spring homebuying season was the strongest market seen since the economic downturn.
- Existing-home sales increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million from May to June.
- Some NAR members are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West.
This year’s spring homebuying season is the strongest housing market seen since the economic downturn, with both home sales and prices soaring to new highs, according to the National Association of Realtors.
The association reported this week that all major regions of the country experienced sales gains in June and have now risen above year-over-year levels for six consecutive months.
Existing-home sales increased 3.2 percent to a seasonally adjusted annual rate of 5.49 million from May to June, NAR said. NAR hasn’t seen sales like that since February 2007, when it counted 5.79 million sales.
Sales have now increased year over year for nine consecutive months and are up 9.6 percent over sales reported in June 2014.
“Buyers have come back in force,” said NAR Chief Economist Lawrence Yun. “This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that’s giving more households the financial wherewithal and incentive to buy.”
Rising mortgage rates may also be prodding “some prospective buyers to buy now rather than wait until later, when borrowing costs could be higher,” Yun added.
Homes are also selling at peak levels, NAR reported. The median existing-home price for all housing types in June was $236,400, an increase of 6.5 percent above June 2014. We haven’t seen sales prices that high since July 2006, when NAR calculated the median price at $230,400. This is now the 40th consecutive month of year-over-year gains, according to NAR.
“Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers,” said Yun.
In addition, some NAR members are reporting drastic imbalances of supply in relation to demand in many metro areas, especially in the West, according to NAR President Chris Polychron.
“The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price,” said Polychron, who is also executive broker with 1st Choice Realty in Hot Springs, Arkansas.
“Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they’re not optimistic they’ll have adequate time to find an affordable property to move into.”