It’s been a solid summer for existing home sales in the U.S., as indicated by the July numbers released on Thursday by the National Association of Realtors. This article from Bloomberg highlights the results of the report.
Purchases of previously owned homes unexpectedly rose in July for a third straight month to reach the highest level since February 2007, figures from the National Association of Realtors showed Thursday. The gain was driven by stronger sales of single-family homes even as the share of first-time buyers shrank.
A limited number of available properties is keeping prices elevated, giving homeowners the financial flexibility to trade up as their housing equity improves. The data and a recent report showing the strongest rate of residential construction since 2007 are consistent with the Federal Reserve’s view that the industry is making progress.
“Demand is solid,” said Brian Jones, senior U.S. economist at Societe Generale in New York. “The driver is that we’ve got a labor market that’s very healthy and mortgage rates are still very low. The Fed has clearly got to be happy with the housing numbers we’ve seen.”
Another report Thursday showed the job market is holding firm. First-time claims for jobless benefits rose by 4,000 to 277,000 last week, according to the Labor Department. Since early March, applications have been lower than 300,000, a level typically associated with an improving employment.
Purchases of previously owned homes increased 2 percent to a 5.59 million annualized rate last month from a revised 5.48 million pace in June, the NAR said.
Existing home sales, tabulated when a contract closes, are an important barometer of housing demand because they account for more than 90 percent of the residential market. New-home purchases, which make up about 7 percent and are tabulated when contracts are signed, are considered a timelier indicator.
The NAR’s data showed that the median price of an existing home climbed 5.6 percent from July 2014 to reach $234,000. While larger gains in property values hurt affordability for first-time buyers, they help bolster housing equity.
“Current homeowners are using their increasing housing equity towards the downpayment on their next purchase,” Lawrence Yun, chief economist at the Realtors’ group, said in a statement.
