National Association of Realtors®(NAR) reported existing-home sales slipped in June. Low supply kept homes selling at a near-record pace but ultimately ended up muting overall activity.
Even though May 2017 showed a decline, June’s sales pace is still 0.7 percent above a year ago.
Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated into a pullback in existing sales in June.
“Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that’s straining their budget,” Yun says. “The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines. The good news is that sales are still running slightly above last year’s pace despite these persistent market challenges.”
Total housing inventory at the end of June declined 0.5 percent to 1.96 million existing homes available for sale; it’s now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months.
Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago.
“It’s shaping up to be another year of below average sales to first-time buyers despite a healthy economy that continues to create jobs,” says Yun. “Worsening supply and affordability conditions in many markets have unfortunately put a temporary hold on many aspiring buyers’ dreams of owning a home this year.”
Properties typically stayed on the market for 28 days in June, which is up from 27 days in May but down from 34 days a year ago. Fifty-four percent of homes sold in June were on the market for less than a month.
“Prospective buyers who postponed their home search this spring because of limited inventory may have better luck as the summer winds down,” said President William E. Brown. “The pool of buyers this time of year typically begins to shrink as households with children have likely closed on a home before school starts. Inventory remains extremely tight, but patience may pay off in coming months for those looking to buy.”
Cash sales made up 18 percent of transactions in June, down from 22 percent both in May and a year ago. Individual investors, who account for many cash sales, purchased 13 percent of homes in June, down from 16 percent in May and unchanged from a year ago. Fifty-six percent of investors paid in cash in June.
Existing-home sales in the South decreased 4.7 percent to an annual rate of 2.23 million (unchanged from a year ago). The median price in the South was $231,300, up 6.2 percent from a year ago.
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