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Existing-home sales jumped in July, with the median price maintaining double-digit year-over-year increases, according to the National Association of Realtors® (NAR).
Total existing-home sales increased 6.5 percent to a seasonally adjusted annual rate of 5.39 million in July from a downwardly revised 5.06 million in June, and are 17.2 percent above the 4.60 million-unit pace in July 2012; sales have remained above year-ago levels for 25 months.
Lawrence Yun, NAR chief economist, said changes in affordability are affecting the market.
“Mortgage interest rates are at the highest level in two years, pushing some buyers off the sidelines,” he said. “The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers.”
Despite higher mortgage interest rates, Yun identified compensating factors that can sustain a continued recovery.
“Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall.”
The national median existing-home price for all housing types was $213,500 in July, which is 13.7 percent above July 2012. This marks 17 consecutive months of year-over-year price increases, which last occurred from January 2005 to May 2006.
Total housing inventory at the end of July rose 5.6 percent to 2.28 million existing homes available for sale, which represents a 5.1-month supply2 at the current sales pace, unchanged from June. Listed inventory is 5.0 percent below a year ago, when there was a 6.3-month supply.
