Home affordability conditions are improving slightly, which helped to fuel more real estate transactions in July. Existing-home sales, which account for completed transactions for single-family homes, townhomes, condominiums and co-ops, saw their first uptick in about four months, rising 1.3% in July compared to June, NAR’s latest housing report shows.
“Despite the modest gain, home sales are still sluggish,” says NAR Chief Economist Lawrence Yun, adding that sales are still down 2.5% from a year ago. “But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”
The 30-year fixed-rate mortgage averaged 6.49% as of Aug. 15, down from 7.09% a year earlier, which is helping to offset higher home prices for buyers.
However, increased buyer demand means sellers are having to compete more for their attention. Total housing inventory was at 1.33 million units at the end of July, up nearly 20% from a year ago, NAR reports. Properties typically remained on the market for 24 days in July, up from 22 days in June.
Still, home prices remain strong. The median existing-home price for all housing types in July was $422,600, up 4.2% compared to a year ago. All major regions of the U.S. continue to post home price increases, led by the Northeast, which posted an 8.3% uptick in median home prices last month.
To find some pricing relief, home buyers in the past have looked to the condo market. Condo prices averaged $367,500 last month. But while “the median home price of condominiums is cheaper, the condominium market is underperforming compared to the single-family market,” Yun notes. “Rising maintenance and insurance costs have lessened the appeal for condominiums.” Existing condo and co-op sales are down nearly 12% from a year ago, according to NAR’s data.
Nevertheless, first-time home buyers are still finding their way into the housing market, comprising 29% of sales in July. First-timers continue to face steep competition from all-cash buyers, who accounted for 27% of transactions in July. Individual investors and second-home buyers tend to make up the biggest bulk of cash sales, purchasing 13% of homes in July, NAR’s data shows.
Regional Breakdown
Here’s a closer look at how existing-home sales fared across the country in July, according to NAR’s research:
- Northeast: Existing-home sales climbed 4.3% compared to June, reaching an annual rate of 490,000. Sales are up 2.1% compared to a year ago. Median price: $505,100, up 8.3% from a year ago.
- Midwest: Sales were mostly flat compared to June, holding at an annual rate of 920,000. That is down 5.2% from the previous year. Median price: $321,300, up 4.5% from July 2023.
- South: Sales rose 1.1%, settling in at an annual rate of 1.79 million. Sales are down nearly 4% from a year earlier. Median price: $372,500, up 2.3% from a year ago.
- West: Existing-home sales increased 1.4% to an annual rate of 750,000. Sales are up 1.4% from a year ago. Median price: $629,500, up 3.4% from a year earlier.
