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Existing-home sales rose 1.3 percent month over month in July, breaking a four-month streak of monthly declines, according to data released Thursday by the National Association of Realtors.
Transactions for single-family homes, townhomes, condominiums and co-ops reached a seasonally adjusted annual rate of 3.95 million as moderating mortgage rates encouraged more homesellers and buyers to enter the market.
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Despite the monthly gain, National Association of Realtors Chief Economist Lawrence Yun said the market is still lagging, as evidenced by the 2.5 decline compared to July 2023.
Lawrence Yun
“Despite the modest gain, home sales are still sluggish,” Yun said. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”
Total housing inventory reached 1.33 million units by the end of July, a 0.8 percent increase from June and a 19.8 percent increase from the previous year. Unsold inventory reached 4.0 months of supply at the current sales pace, down from 4.1 months in June but up from 3.3 months in July 2023.
The inventory boost had little effect on price trends, with annual growth accelerating from 4.1 percent in June to 4.2 percent in July. The median existing-home price for all housing types reached $422,600, with all four U.S. regions posting price gains.
The median existing single-family home price rose 4.2 percent year over year to $428,500 in July, while the median existing condo price rose 2.7 percent year over year to $367,500. Despite the relative affordability of condos, existing condominium and co-op sales are declining (-11.6 percent) at a faster rate than existing single-family sales (-1.4 percent).
“The median home price of condominiums is cheaper, yet the condominium market is underperforming compared to the single-family market,” Yun said. “Rising maintenance and insurance costs have lessened the appeal for condominiums.”
Danielle Hale
Although a softening market has yet to yield sales increases, Realtor.com Chief Economist Danielle Hale said recent economic and housing trends have set the stage for a potentially robust fall homebuying season.
“Mortgage rates have moved in a buyer-friendly direction after playing the foe for much of the peak homebuying season,” she said in an emailed statement. “The rate for a 30-year fixed mortgage topped out at 7.22 percent in early May and remained near 7 percent for the better part of June–when many July homebuyers would have locked in a mortgage rate.”
“Easing inflation helped accelerate the decline in mortgage rates in mid-July and rates currently hover near 15-month lows,” she added. “This is likely to bode well for buyers in the fall–a typically advantageous season for home shoppers. In fact, the updated 2024 Realtor.com Housing Forecast expects mortgage rates to fall to 6.3 percent by the end of the year, which could mean a hotter fall season than is typical.”
