Existing home sales and median home prices increased +2.5% and +4.3% respectively in July 2019, according to the National Association of REALTORS® (NAR).
Translated into “real” numbers, total existing home sales (single-family homes, townhouses, condominiums and co-ops) in July 2019 rose to a seasonally adjusted annualized rate of 5.42M, or +0.6% above July 2018.
The median price of an existing home rose from $249,300 in July 2018 to $280,800 in July 2019 for a gain of +4.3%. July 2019 represented the 89th consecutive month of y/y home price gains.
According to Freddie Mac, the average commitment rate for a 30-year conventional, fixed-rate mortgage decreased to 3.77% in July 20129, down from 3.8% in June 2019 and down from 4.54% throughout the year of 2018.
NAR’s chief economist, Lawrence Yun, sees the pros and cons of low mortgage rates playing out in the housing market. On the pro side of the ledger, low rates are spurring buyers into the market and making homeownership more affordable. On the con side, low mortgage rates are making the low supply of affordable housing more severely low and thus driving up prices on the few and far between affordable houses there are.
Yun said, “Clearly, the inventory of moderately-priced homes is inadequate and more home building is needed. Some new apartments could be converted into condominiums, thereby helping with the supply, especially in light of new federal rules permitting a wider use of FHA (Federal Housing Authority) mortgages to buy condominium properties.”
In fact, inventory has lost ground since the Federal Reserve has cut mortgage rates. An inventory loss of -1.6% or 1.89M existing homes in July 2019 compared to 1.92M existing homes in July 2018 is significant since inventory has been at historic lows for too long.
July 2019 saw a 4.2-month supply of unsold inventory, down from 4.4 months in June 2019 and down from 4.3 months in July 2018. Average days on the market rose to 29 days in July from 27 in June and the same in July 2018. 51% of homes on the market sold in less than one month.
Single-family home sales increased to 4.71MK in July 2019, an increase of +1% from one year ago. Existing condominium and co-op sales recorded seasonally adjusted annualized rates of 580M units, similar to June 2019 but down -3.3% from one year ago. (Likely, new FHA financing rules regarding condominiums and co-ops will improve such sales going forward.)
Existing single-family home prices came in at $284,000 in July 2019, an increase of +4.5% compared to one year ago. Existing condominium sale prices came in at $254,300, an increase of +2.5% from July 2018.
Regionally, sales and prices looked like this in July 2019:
- Northeast
- -2.9% decline in sales from prior month to an annual rate of 660,000 or a -4.3% annual decline
- -1% decline in price from July 2018 at $305,800
- Midwest
- +1.6% increase in sales from June 2019 to an annual rate of 1.27M and a +0.8% increase over July 2018
- +8.1% increase in median price from last year to $226,300
- South
- +1.8% increase in sales to an annual rate of 2.31M in July 2019, an increase of +2.7% from July 2018
- +5.2% compared to July 2018 to $245,100
- West
- Spiked +8.3% to an annualized rate 1.128M in July 2019 BUT -0.8% below July 2018
- $408,000 as median price
