The U.S. existing home sales surged to an eight-year high. On Thursday August 20th, the National Association of Realtors published its report on exiting home sales for the month of July. (Source: The National Association of Realtors, August 20, 2015.)
In July, total existing home sales increased two percent to a seasonally-adjusted annual rate of 5.59 million units in July from 5.48 million units in June. This marks the third consecutive month with increasing existing home sales.
Moreover, July’s existing home sales were at the highest pace since February 2007. The number has been climbing steadily with ten consecutive months of year-over-year increases. Right now, it stands 10.3% higher compared to last July’s 5.07 million units.
Lawrence Yun, Chief Economist at the National Association of Realtors, attributed the higher existing home sales in July to job market improvement and the higher-than-expected future mortgage rates.
“The creation of jobs added at a steady clip and the prospect of higher mortgage rates and home prices down the road is encouraging more households to buy now,” said Yun. “As a result, current homeowners are using their increasing housing equity towards the downpayment on their next purchase.”
Total housing inventory declined 0.4% to 2.24 million units at the end of July, which was also 4.7% lower compared to 2.35 million units a year ago. Unsold inventory would now equal to 4.8 months of supply at the current pace of sales, slightly down from the 4.9 months in June.
Stronger sales figures also came with higher prices in the U.S. housing market . In July, the median price of existing home sales for all housing types was $234,000, 5.6% higher compared to July of last year. Note that this was the 41st consecutive month of year-over-year increases in median existing home prices.
Higher prices made it harder for those who wanted to buy their first home. In July, the share of first-time buyers declined for the second consecutive month, from 30% in June to 28%. Moreover, the share of first-time buyers was also the lowest since January of this year.
The rise in July’s existing home sales was driven by strong sales of single family homes, which surged 2.7% to 4.96 million units. Existing condominium and co-op sales, on the other hand, declined 3.1% to 630,000 units.