The U.S existing home sales were up for the second month. Sales increased by 2.0% to 5.99 million units vs the 5.83 million predicted. This is also an increase in June’s number, which was 5.87 million units.
According to the National Association of Realtors, home sales increased in the Midwest, South and West of the country. But remained the same in the Northeast.
Existing home sales make up the majority of the U.S. property sales. And have increased by 1.5% since last year this time. The average price was down to $359,000 versus June’s number, but it was still higher by 17.8% compared to the same period last year.
Lawrence Yun, the chief economist at NAR, said that the sales growth was more in the upper-end markets. Mid- to lower-tier markets’ growth is less, and there are too few new homes available.
Building permits increased after three months of declining rates. Supply issues and increase construction costs affected new home building numbers.
New home buyer demand surpasses supply.
New home buyers were struggling to purchase since there was a high demand and supply was constrained. The demand increased significantly during the Covid-19 pandemic since mortgage loan rates were low, but supply couldn’t keep up.
New home sales data is due for release later Tuesday. It measures the new single-family homes which were sold the month prior. The new home and existing home sales reports are usually having a close correlation.
The forecast for new home sales are 700,000 units; the units for June reached 724,000, revised from 769,000. New home sales were the lowest in 14-months in June.
According to Yun, home sales are slowing down. However, it is still a competitive market. On average, a house sells within 17 days on the market.
Interestingly, now only 30% of buyers are first-time homeowners. This number was around 40% historically. Furthermore, almost 25% of all buyers purchase with cash which is also higher than usual.
The economic growth rate is vital to sustaining the momentum in sales. An increase in Covid-19 cases could hinder the sales rate since it has a ripple effect on the economy. MetaNews to update further happenings.