Existing Home Sales Rebound, Raising Median U.S. Home Price

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.