The National Association of Realtors®
reported today that existing-home sales in July were down from the previous
month but were significantly higher than a year earlier. Existing home sales
include completed transactions on single-family homes, townhomes, condominiums,
and cooperative apartment. The
annualized rate of existing home sales fell to 4.67 million in July from 4.84
million in June, a drop of 3.5 percent. The June figure was significantly revised
upward in this month’s report from an earlier estimate of 4.77 million. The
July number is a 21.0 percent increase from July 2010 which NAR described as a
cyclical low period following the expiration of the home-buyer tax credit.
Lawrence Yun, NAR chief economist, said there is a tug and
pull on the market. “Affordability conditions this year have been the
most favorable on record dating back to 1970, but many buyers are being held
back because banks are offering financing to only the most highly qualified
borrowers, ignoring a large share of otherwise creditworthy buyers,” he
said. “Those potential buyers represent the difference between an uneven
recovery and a much more robust housing market that could stimulate additional
economic activity and create jobs.”
As was the case in
June, contract failures in which a pending sale is cancelled because of declined
mortgage applications, low appraisals, or other problems were reported by 16
percent of NAR members. In addition, 9 percent of Realtors®
report a contract was delayed in the past three months due to low appraisals,
and another 13 percent said a contract was renegotiated to a lower sales price
because an appraisal was below the initially agreed price.
NAR President Ron
Phipps, broker-president of
Phipps Realty in Warwick, R.I., said an unacceptably high number of potential
home buyers are unable to complete transactions. “For both mortgage credit and home appraisals, there’s been
a parallel pendulum swing from very loose standards which led to the housing
boom, to unnecessarily restrictive practices as an overreaction to the housing
correction,” he said.
The median price for all
existing homes was $174,000, down 4.4 percent from one year earlier. Approximately 29 percent of all sales in July
were of distressed homes either from foreclosure sales, real estate owned by
lenders, or short sales compared to 30 percent last month and 32 percent one
year earlier. These often deeply
discounted sales continue to put downward pressure on housing prices.
sales declined 4.0 percent to a seasonally adjusted annual rate of 4.12 million
from 4.29 million but were 21.5 percent higher than the annual rate of 3.39
million in July 2010. The median
existing single-family home price was $174,800, down 4.5 percent from a year
ago. Condominium and co-op sales were
unchanged from June’s rate of 550,000 and are 17.3 percent above sales a year
ago. The median price for a condo was
$168,400, a 4 percent decrease year-over-year.
First time buyers were responsible for 32
percent of sales, up one percentage point since June with repeat homebuyers
accounting for 50 percent and investors 18 percent. Investors accounted for most of the 29
percent of sales that were all-cash transactions. All of these figures are essentially
unchanged both year-over-year and month-over-month.
Total housing inventory was down 1.7 percent at
the end of the month with 3.65 million existing homes available for sale, a 9.4
month supply at the current pace of sales.
In June the inventory represented a 9.2 month supply. at the end of July
fell 1.7 percent to 3.65 million existing homes available for sale, which
represents a 9.4-month supply4 at the current sales pace, up from a
9.2-month supply in June.
On a regional basis, sales in the Northeast and
the Midwest were up while the South and West declined. The Northeast’s annual rate rose 2.7 percent
to 750,000, a 19 percent increase since last year while the Midwest increased 1
percent to a pace of 1.05 million, 31.1 percent higher than July 2010. The median price in both regions also
declined year-over-year; in the Northeast prices were down 6.8 percent to $245,600
while the Midwest dropped 2.9 percent to $146,300.
In the South existing-home sales declined 1.6
percent to a rate of 1.84 million in July but are 19.5 percent above sales in July
2010. Sales in the West sales were down 12.6
percent to an annual pace of 1.04 million in July; this was 6.9 percent higher
than a year ago. The median price in the West was $208,300 down 7.1
percent and in the South the median was $152,600, 2.2 percent below a year ago.