Existing Home Sales, which measures closings on existing homes, rose 1.3% in July to an annualized pace of 3.95M units, which was in line with market estimates and broke a four-month losing streak. Sales were down 2.5% year over year.
This report likely measured people shopping for homes in May and June, when rates were above 7%. Rates have since come down, which we believe will lead to more sales in the upcoming reports.
Inventory increased 0.8% month over month to 1.33M units. Inventory is now up 20% year-over-year, but it’s important to note that there is a seasonality to inventory and we always see inventory move up and peak around this time of the year, then begin to fall.
Based on the increased pace of sales, even with the increase in inventory, there is a four months’ supply of homes, which is down from 4.1 in the previous report and below a more normal market’s 4.6 months’ supply.
Homes remained on the market for 24 days on average, up from 22 days in June but this metric has been trending lower. In May, homes were on the market for an average of 24 days, less than the 26 days seen in April and 33 days in March. We also saw 24% of homes sold above the list price, down from 29% in the previous report but showing that there are still bidding wars in about a quarter of home sales nationwide.
The median home price was $422,600, down 1% from last month but up 4.2% from last year. First-time homebuyers accounted for 29% of sales, which was unchanged. Cash buyers accounted for 27% of sales, down from 28% in the previous report, while Investors made up 13%, down from 16%.
What’s the bottom line? The number of closings increased in July and some of the internals within the report point to demand remaining strong even in the face of elevated rates. Homes remained on the market for a short period, an average of 24 days in July.
