Sales of previously-owned homes in July rose for the fourth straight month, hitting their highest pace in 2014, according to data released Tuesday by the National Association of Realtors.
Sales of existing-homes–which include single-family homes, townhomes, condominiums and co-ops–climbed 2.4% to an annual (seasonally adjusted) pace of 5.15 million in July. That tops June’s downwardly revised annual (seasonally adjusted) pace of 5.03 million and is the highest rate in nine months.
July’s numbers are good news for housing after a sluggish start this year, when the market was weighed down by winter storms, underwater mortgages, tight inventory, and rising mortgage rates. However, the numbers can’t match housing’s 2013 hot streak: last month’s pace was 4.3% below the July 2013 (last year’s peak), when the pace stood at 5.38 million units.
Still, the slowed pace of price gains is helping to normalize the market. And as housing prices rise, more people put their homes on the market, easing inventory levels. “The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market,” said Lawrence Yun, NAR chief economist. “More people are buying homes compared to earlier in the year and this trend should continue with interest rates remaining low and apartment rents on the rise.”
Existing-home sales data is an important bellwether of the housing market, since the vast majority of homes are resales rather than new construction. At the end of July there were 2.37 million existing homes available for sale, a 5.5-month supply at the current sales pace. (A six-month supply is considered a healthy market.) Unsold inventory is 5.8% higher than a year ago.
For now, home prices are rising at a slower rate than last year’s breakneck pace. In July the median price of an existing-home was $222,900, 4.9% over the median price one year earlier. Year-over-year, home prices have now risen for 29 consecutive months.
Sales pace and price level varied widely by region in July. In the Northeast, the pace stayed flat from June to July but was 9.9% below the rate one year earlier. The median price in this region was $273,600 in July, 2.4% above the price in July 2013.
Distressed homes (foreclosures and short sales) accounted for just 9% of home sales in July, down from 15% one year earlier. That marks the first time the market share of distressed properties has dropped to single-digits since NAR started tracking them in October 2008.
The share of first-time buyers in the housing market rose slightly in July (for the second straight month) to 29%, but remains historically low.