Home sales for previously owned properties experienced a significant increase in July

The housing market is experiencing a significant change, favouring buyers for the first time since before the pandemic, according to Lawrence Yun, the Chief Economist of the National Association of Realtors (NAR).

In July, existing-home sales increased by 2.0%, reaching an annual rate of 4.01 million, as reported by NAR. This upward trend is being influenced by the increased inventory and easing price pressures. Yun stated that the increased inventory provides homebuyers with more choices, boosting their confidence and enabling them to negotiate for a better price.

The current inventory level equates to a 4.6-month supply of homes, slightly above July 2024. In July, the inventory of homes increased by 15.7% year-over-year, reaching 1.55 million units, the highest level since the early months of the COVID-19 pandemic.

Regionally, the Western region showed a significantly stronger increase in home sales compared to the average, with the Northeast posting the strongest monthly gain in sales, up 8.7%. The South followed closely with a 2.2% increase, and the Midwest experienced a slight dip of 1.1%. However, the West saw a decrease in sales, slipping 1.4% compared with June.

Despite the sluggish price growth, homeowners remain in solid financial shape. Only 2% of transactions were foreclosures or short sales, a near-record low. Wage growth is outpacing home price gains, making ownership slightly more affordable.

The median price of an existing home remained virtually unchanged from a year earlier at $422,400. However, regional disparities were observed in median prices: prices rose in the Northeast (0.8%) and Midwest (3.9%), but fell in the South (0.6%) and West (1.4%).

Single-family sales rose by 2.0% in July, while condo and co-op transactions gained 2.8% on the month. Despite a 2.6% decrease in condo sales compared to last year, prices slipped only 1.2%.

Lawrence Yun also mentioned that buyers have more choices and condominium sales increased in the South region. This shift in the housing market is a welcome relief for potential homebuyers who have been struggling to find affordable homes in a highly competitive market.

The housing market is slowly but surely moving towards a more balanced state, offering opportunities not seen since before the pandemic. As the market continues to evolve, it will be interesting to see how these changes impact both homebuyers and homeowners in the coming months.

Home sales for previously owned properties experienced a significant increase in July