Sales of existing U.S. homes increased in July, according to the National Association of Realtors, even as inventory in the lower price ranges dwindled.
July’s sales pace rose to a seasonally-adjusted annual rate of 4.47 million, up 2.3 percent from 4.37 percent in June. Sales are also up 10.4 percent from the previous year.
At the same time, it has been difficult for buyers to find many properties in the lower price ranges, limiting the choices for first-time buyers and some investors. Total housing inventory did actually increase 1.3 percent in July to 2.40 million homes, but it is down a dramatic 23.8 percent from July 2011. At the current sales pace, there is a 6.4-month supply of homes.
“Correctly priced homes, regardless of price range, are selling quickly these days,” said NAR President Moe Veissi in a press release. ”Fully one-third of homes purchased in July were on the market for less than a month, and only 21 percent were on the market for six months or longer.”
Interest rates have been helping to move sales along as well. The national average rate on a 30-year fixed rate conventional mortgage fell to a new all-time low in July to 3.55 percent, down from 3.68 percent in June.
“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand,” said Lawrence Yun, NAR chief economist. “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
The national median home price rose also in July to $187,300, up 9.4 percent from the year before. The NAR said that July’s price gain was the strongest since January 2006, at the peak of the housing boom.