Sales of existing homes in the U.S. increased for the first time in five months, as more houses came on the market. Though sales rose a modest 1.4% from May, sales are up 22.9% from the same period in 2020, according to data released by the National Association of Realtors (NAR). It was the second highest year-over-year (YOY) increase recorded since January 1999.
NAR’s chief economist Lawrence Yun said supply has ticked up “modestly” in recent months as a result of increased housing starts and more homeowners putting properties up for sale. The association found total inventory at the end of the month was 1.25 million units, 3.3% higher than in May.
Rising Sales, Record Prices
Prices also rose in June, with the median home price setting a new record at $363,300, 23.4% higher than in 2020. Yun added that as inventory remains tight, he doesn’t expect prices to fall, but does anticipate they might continue to rise at a slower pace by the end of the year, carrying on a nearly decade-long trend of consecutive YOY rate gains.
Buyer Competition Heats Up
He added that those record high prices combined with tight supply are making it particularly difficult for first-time buyers to enter an increasingly competitive housing market. In June, first-time buyers represented roughly a third or 31% of sales, down from 35% last year.
Adding to the difficulties for first-time buyers, houses are being taken off the market faster and all-cash sales have grown, accounting for 23% of transactions in June, compared with just 16% in June 2020. The majority or 89% of homes sold in June were on the market for less than a month, typically selling within 17 days, compared to an average of 24 days in May.
"Huge wealth gains from both housing equity and the stock market have nudged up all-cash transactions, but first-time buyers who need mortgage financing are being uniquely challenged with record-high home prices and low inventory,” Yun said.
More New Sales Were in the South
Nearly half or 44% of new sales took place in the South, followed by the Midwest at 23% and the West at 20%, with only 13% in the Northeast. Every region recorded jumps in price, though the difference was most pronounced in the Northeast, where prices rose 45.1% year-on-year, while other regions posted between 18-24% in gains. Nationwide, slightly under half or 43% of home sales fell within the $250,000-500,000 price range.
Additional reporting by Kara Greenberg.