From the WSJ:
Sales of existing homes climbed in July to their prerecession pace, but low inventory and higher prices threaten to curtail those gains heading into the fall.
Existing-home sales rose 2% last month from June to a seasonally adjusted rate of 5.59 million, the National Association of Realtors said Thursday. Last month’s sales pace was the highest since February 2007 and 10.3% higher than a year earlier.
Despite relatively steady gains in home sales in the past year, thinning supply and high prices loom as headwinds that could slow the recovery. As well, mortgage rates could be poised to rise when the Federal Reserve raises short-term interest rates, potentially as soon as next month.
Total housing inventory fell 0.4% at the end of July to 2.24 million existing homes available for sale, 4.7% lower than a year ago. At the current pace of sales it would take 4.8 months to exhaust the supply of homes on the market, down from 5.6 months a year ago, the NAR said Thursday.
The median sale price for a previously owned home slipped slightly to $234,000 from June’s $236,300, but is still 5.6% higher than a year earlier. July’s prices mark the 41st straight month of year-over-year price gains.
This combination of rising prices and thin supply has left some prospective buyers on the sidelines, especially as rising rents eat up a larger portion of incomes, making it harder to save for a down payment.
Mr. Yun noted that first-time buyers declined to 28% of all buyers, the lowest share since January. Sales are being driven largely by buyers who already own homes, he said.