Sales of homes went up for the first time in five months because there were more listings, which brought more buyers into the market.
On Thursday, the National Association of Realtors said that sales of previously owned houses rose 1.3% in July to 3.95 million units per year.
Those are all the homes that would be sold in a year if they were sold at the same rate every month as they were in July. Seasonal changes are made to the numbers.
Existing-home sales went up by 3.5% without taking seasonal factors into account.
The rate of sales was in line with what economists polled by Dow Jones Newswires and the Wall Street Journal thought would happen.
The number of homes sold is 2.5% less than it was in July 2023.
Important facts: The average price of a previously owned home went up 4.2% from July of last year to $422,600. We’ve never seen that price that high in July before.
“Home prices usually reach their highest point in June and then slowly go down all the way through the winter,” said Lawrence Yun, chief economist for the NAR.
A month ago, 29% of homes were sold above the list price, but now only 24% are. On average, 2.7 offers were made on each home.
In July, there were 1.33 million houses on the market, 19.8% more than the same month last year. There is enough stock that hasn’t been sold to last four months. A balanced market has enough unused goods to last for four to six months.
The average time a house was on the market was 24 days, up from 22 days the month before.
Most of the country saw a small rise in sales of existing houses, with the Northeast showing the most growth. The rate of home sales stayed the same from one month ago to one month ago in all but the Midwest.
27% of sales went to people who paid cash only. Individual owners or people buying a second home made up 13% of the group.
About two-thirds of the sales were made by first-time buyers.
In the big picture, home sales went up by a small amount in July. This was because buyers responded to more homes on the market. The housing market should see more sales now that mortgage rates are lower and there are more homes for sale.
However, the number of mortgage applications to buy homes has been going down over the last week, which is a sign that things are not going as planned. People who want to buy homes aren’t acting right now, which could mean that the turnaround takes longer than expected.
What the NAR said: “Home sales are still slow, even with the small gain,” Yun said in a statement. “But shoppers do have more options, and prices are going down because interest rates are going down.”
Yun told reporters on a call that he wasn’t happy about the rise either, since sales are still slow.
He also said that the rise in inventory was important because it showed that the lock-in effect was weakening. “Despite all the talk about how much people love their 3% or 4% mortgage rate, we are finding that people are giving that up because they have to sell their home because of changes in their lives,” he said.
What do they mean? Thomas Ryan, a North American economist, wrote in a note, “The small rebound in existing home sales in July seems underwhelming after last month’s big drop in mortgage rates. But the data are based on completed transactions, so it will take at least another month to show the effect of lower borrowing costs.” “We think that lower interest rates on loans will lead to a slow but steady rise in activity this year.”
Even though the number of home sales went up in July, it’s still “historically weak number of home sales considering that transactions averaged 5.1 [million annualized] during the 2010s and reached a peak of around 6.6 [million] during the pandemic buying frenzy, demonstrating that the market remains frozen,” he said.
