A National Association of Realtors report released Thursday sent mixed signals about the recovery of the housing market. While existing-home prices continued to show gains in June, sales declined with limited supplies of affordable homes limited first-time buyers, the NAR said in a statement.
Total existing-home sales, which include single-family homes, townhomes, condominiums and co-ops, declined 5.4 percent to a seasonally adjusted annual rate of 4.37 million last month. But this figure is 4.5 percent higher than the 4.18 million-unit level at the same time last year.
“Buyer interest remains solid,” observed Lawrence Yun, NAR chief economist, “but inventory continues to shrink and that is limited buying opportunities. This, in turn is pushing up home prices in many markets.”
The national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to an unprecedented 3.68 percent in June, down from 3.80 in May, according to Freddie Mac. The rate was 4.51 percent in June 2011. The national median existing-home price for all housing types was $189,400 in June, up 7.9 percent from last year. This marks the four consecutive monthly price increases from a year earlier, the first time this has occurred since the February to May period in 2006, the NAR observed. The June increase was the strongest since February 2006.
Foreclosures and short sales sold at deep discounts comprised one-quarter of June sales, unchanged from May, but down 30 percent from last year. Foreclosures sold for an average discount of 18 percent below market. This portion of the market, Yun forecast, “will further diminish because the number of seriously delinquent mortgages has been falling.
Favorable market conditions and “pent-up demand has virtually doubled buyer traffic, NAR President Moe Veissi, but this has led to a tightening of inventory and a growth in home prices.
Total housing inventory at the end of June fell 3.2 percent to 2.39 million existing homes available for sale. This represents a 6.6-month supply.
The NAR report follows news Wednesday from the U.S. Commerce Department that new home construction increased 6.9 percent in June, and 23.6 percent over June 2011. The pace of new construction is the fastest the housing market has seen since April 2010, according to National Association of Home Builders.
Home builders’ confidence is at a five-year high, according to the July Housing Market Index reported by the NAHB yesterday. The 6-point jump from June to July, the biggest one-month gain in nearly 10 years, puts the index at its highest point since March of 2007.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.