Previously owned home sales rose a record 20.7% from May, the largest monthly increase since NAR began tracking in 1968.
“Record low mortgage rates are certainly helping to attract buyers to the market,” said Lawrence Yun, chief economist at NAR. “But inventory levels are declining, which could create a bottleneck for future sales profits.”
But sales are still below where they were before the pandemic and have remained low since this time last year. The annual decline in sales of existing homes, which includes full sales of single-family homes, townhomes, condos, and cooperatives, was 11.3%.
While the improvements could be tempered by a resurgence of coronavirus cases, a faltering economy and buyer comfort levels, this is progress for the real estate market, said Robert Frick, corporate economist at Navy Federal Credit Union. The market may be up and down for a while.
“Sales are still hampered by the weak economy, causing fewer Americans to move to look for work and keeping the supply of existing homes on the market low, as well as the reluctance of potential buyers to tour homes due to Covid -19, “Frick said. “Virtual tours help, but cannot replace the buyer’s in-person inspection.”
Prices continue to rise in low inventory
Homes sold quickly and at high prices in June, even when inventory remained limited.
“Home prices increased during the shutdown and could increase further due to strong competition from buyers and a significant shortage of supply,” Yun said.
The median price of an existing home in June was at a record high of $ 295,300, which is 3.5% more than a year ago. The June price increase marks 100 consecutive months of profit year after year.
With such a low inventory, the houses did not stay long. Properties were typically on the market for 24 days last month, below the 26 days in May and even less time than the 27-day average in June 2019. More than half of the homes sold in June 2020 were in the market for less than a month.
The low inventory of homes available for sale continued to slow market activity, Yun said. While home inventory at the end of June was up 1.3% from May, it was still down 18.2% from the previous year.
Sales increased in all regions of the United States in June. Average home prices have grown in each of the top four regions for a year.
Record low rates that keep buyers interested
“Buyers are in place, but the new listings are still the key to the housing recovery,” said Danielle Hale, chief economist at Realtor.com. “More vendors are needed before we see year-over-year gains in home sales.”
He pointed to future indicators, such as buyer traffic and mortgage applications, which are higher than at this time last year and show that demand is there.
“There is still strong demand from home buyers this summer as home buyers have returned to the market in many states,” said Joel Kan, associate vice president for economic and industrial forecasting at MBA.
But the ongoing pandemic could continue to impact home sales.
“The recent resurgence in case numbers is likely to affect demand and continue to keep inventory at suppressed levels,” said Rubén González, chief economist at real estate firm Keller Williams. “But agents and consumers have now had enough time to adapt to social distancing practices and virtual tools, so the impact on sales may be less than what we saw in April.”
.
