WASHINGTON – Existing-home sales increased in June, snapping four consecutive months of declines, according to new data from the National Association of Realtors (NAR).
The NAR said three of the four major U.S. regions registered small month-over-month gains, while the fourth remained flat. However, all four areas notched double-digit year-over-year gains, its analysis added.
Total existing-home sales of single-family homes, townhomes, condominiums and co-ops, grew 1.4% from May to a seasonally adjusted annual rate of 5.86 million in June. Sales climbed year-over-year, up 22.9% from a year ago (4.77 million in June 2020), the NAR said.
Modest Improvement in Supply
"Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales," said Lawrence Yun, NAR's chief economist. "Home sales continue to run at a pace above the rate seen before the pandemic."
According to the NAR, total housing inventory at the end of June amounted to 1.25 million units, up 3.3% from May's inventory and down 18.8% from one year ago (1.54 million). Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May's 2.5-month supply but down from 3.9 months in June 2020, the organization added.
The median existing-home price for all housing types in June was $363,300, up 23.4% from June 2020 ($294,400), as every region recorded price jumps. This marks 112 straight months of year-over-year gains, the NAR said.
"At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year," Yun said. "Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available."
NAFCU Analysis
Added NAFCU’s chief economist, Curt Long, “Mortgage rates have been heading lower, boosting demand and remaining only 23 basis points higher than the all-time low set in January. Demand is ebbing somewhat from its frenzied levels of earlier this year, but that is only encouraging buyers who sat out the rush to re-enter the market. On the supply side, housing starts rose 6.3% in June while permits fell 5.1%. The National Association of Realtors reported that investors accounted for a smaller share of sales in June than in the prior month. A further improving economy and rising wages will also boost sales into the medium and long term. NAFCU expects sales to remain strong for the rest of the year, still limited by availability and affordability.”
Other Data Points
Other data points released by the NAR in its latest analysis:
- Properties typically remained on the market for 17 days in June, unchanged from May and down from 24 days in June 2020. Eighty-nine percent of homes sold in June 2021 were on the market for less than a month.
- First-time buyers accounted for 31% of sales in June, also even with May but down from 35% in June 2020. NAR's 2020 Profile of Home Buyers and Sellers – released in late 20204 – revealed that the annual share of first-time buyers was 31%.
- Individual investors or second-home buyers, who account for many cash sales, purchased 14% of homes in June, down from 17% in May and up from 9% in June 2020. All-cash sales accounted for 23% of transactions in June, even with May and up from 16% in June 2020.
- Distressed sales – foreclosures and short sales – represented less than 1% of sales in June, equal to May's percentage but down from 3% in June 2020.
Regional Breakdown
Existing-home sales in the Northeast increased 2.8% in June, recording an annual rate of 740,000, a 45.1% rise from a year ago. The median price in the Northeast was $412,800, up 23.6% from June 2020, the NAR said.
Existing-home sales in the Midwest rose 3.1% to an annual rate of 1,330,000 in June, an 18.8% increase from a year ago. The median price in the Midwest was $278,700, an 18.5% increase from June 2020.
Existing-home sales in the South were unchanged from May, posting an annual rate of 2,590,000 in June, up 19.4% from the same time one year ago. The median price in the South was $311,600, a 21.4% climb from one year ago.
Existing-home sales in the West rose 1.7%, registering an annual rate of 1,200,000 in June, a 23.7% jump from a year ago. The median price in the West was $507,000, up 17.6% from June 2020.