Milwaukee, Wisconsin 2021-07-23 12:20:01 –
By ALEX VEIGA
AP Business Writer
Sales of previously occupied US homes increased in June and fell for the fourth straight month. Meanwhile, strong demand for luxury properties and ultra-low mortgage rates have pushed prices to new highs.
According to the National Association of Real Estate Agents, sales of existing homes increased 1.4% from May last month to a seasonally adjusted annual rate of 5.86 million units. According to FactSet, this is just below the 5.9 million annual rates expected by economists.
Sales surged 22.9% from June last year, when some states were still locked down due to a pandemic. Last month’s home sales pace was above the 5.7 million annual rate in February 2020, before the coronavirus led to a slowdown in sales last spring.
The gradual recovery in sales last month discouraged many buyers, especially those who want to become homeowners for the first time, due to soaring prices and the limited number of homes available on the market. It has fallen for months in a row.
Home sales in June were less than $ 150,000, down year-over-year, but buyers who bought properties sold for more than $ 250,000 increased median US home prices by 23.4% year-on-year. It pushed it to a record high of $ 363,300, NAR said.
With so few homes for sale, anyone who puts a home on the market will routinely receive multiple offers that exceed the asking price, and many will sell within a few days.
Still, there are signs that the red-hot housing market is starting to cool a bit, said Lawrence Yun, chief economist at NAR.
Although the market is still overheating, sellers are currently receiving typically five to about four offers, Yun said. Prices are still the highest ever, but he points out that they tend to be lagging indicators.
“Maybe we’ve already changed the corner from super-hot to slightly hot,” Yun said.
Another auspicious sign for homebuyers: The number of homes on the market has increased last month, although it has been declining sharply since a year ago.
“Inventory is starting to grow,” Yun said. “It’s increasing little by little, but you may still have turned the corner of inventory.”
According to the NAR, the number of unsold homes at the end of June was 1.25 million, an increase of 3.3% from May, but a decrease of 18.8% from June 2020. At the current sales pace, it is equivalent to 2.6 months of supply. The supply of unsold homes at the end of May was 2.5 months.
Housing typically remained on the market for 17 days in June, unchanged from May and down from 24 days a year ago.
Some trends may keep the housing market competitive. Mortgage rates remain close to historically low levels, helping to make financing more affordable. According to mortgage buyer Freddie Mac, the average 30-year mortgage rate has fallen to 2.78% this week. The average one year ago was 3.01%.
While more millennials are aiming to become homeowners, many Americans who were able to work remotely during a pandemic are in different cities or states to buy affordable homes. Increasingly choosing to go to.
Another driving force is increased activity on Wall Street in the acquisition of single-family homes. Large institutional investors are starting to buy and rent real estate. Full cash transactions, including investors and wealthy buyers, accounted for 23% of June sales, up from 16% in the previous year.
Strong demand is also pushing up the price of new homes. New home sales fell 5.9% in May, the second straight month of decline, the Commerce Department reported last month. The median new homes sold in May jumped 18.1% from a year ago to $ 374,400.