The nation’s residential real estate sector took a giant step forward in July as year-over-year sales increased by nearly 9 percent, according to the National Association of Realtors (NAR).
Existing home sales swelled to 5.86 million in July, up from 5.39 million in the same month last year, an 8.7 percent hike. For the first time, national median home prices exceeded $300,000, NAR said.
“With the sizable shift in remote work, current homeowners are looking for larger homes, and this will lead to a secondary level of demand even into 2021,” said Lawrence Yun, NAR’s chief economist, in a statement.
Every region of the country saw home prices rise, while three of the four had sales hikes.
Existing home sales jumped 27.5 percent in the Midwest to reach an annual rate of nearly 1.4 million last month, up 10 percent from a year ago. The median price in the Midwest was $244,500 in July, an 8 percent increase over July 2019.
In the South, sales rose by more than 19 percent to reach an annual rate of 2.6 million in July compared to one year ago. The median price in the South was $268,500, a 10 percent increase from a year ago.
Existing-home sales in the West increased 30.5 percent to an annual rate of 1.2 million, up nearly 8 percent from last July. The median price in the West was $453,800, up 11 percent from July 2019.
The Northeast was an outlier: Sales fell by 6 percent in July to 640,000. But the median price was $317,800, up 4 percent from July 2019.
Brokers say there is still a shortage of homes to sell. Total housing inventory at the end of July totaled 1.5 million units, down 21 percent from 1.9 million one year ago. As a result, Yun said, the lack of available homes is hurting sales.
“The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” he said. “More homes need to be built."
But agents who exclusively represent buyers say that escalating prices are a major factor limiting sales. This week, Drew Uher, CEO of HomeLight, the San Francisco-based real estate referral company, told PYMNTS that home sales have surged due to record-low mortgage rates and a radical re-centering of people’s housing priorities.
Also this week, Ralph McLaughlin, chief economist for Haus, a co-investment platform for homebuyers, told Bloomberg that the economic meltdown and low mortgage rates have combined to make home-buying surprisingly attractive.