Home sales continue to rise
More existing homes were sold in July, and the median price rose. Lack of inventory in lower price ranges and tight lending continue to slow sales.
Sales of existing homes rose in July, despite the continuing challenge of fewer homes for sale, especially in lower prices ranges.
The number of homes sold nationwide rose 2.3% in July compared with the previous month, and were up 10.4% from July 2011, according to data from the National Association of Realtors.
The median home price rose for the fifth straight month, likely as a result of a higher percentage of more expensive homes in the calculations. The national median home price stood at $183,300, up 9.4% from July 2011.
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Low mortgage interest rates and rising rents are pushing more people into the home purchase market, said Lawrence Yun, the NAR's chief economist.
"Combined, these factors are helping to unleash a pent-up demand," Yun said in a news release. "However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions."
If housing sales continue at the current pace, about 4.47 million existing homes will be sold this year. If conditions were normal, with more favorable lending standards and a better jobs picture, 5 million to 5.5 million homes could be sold, Yun said.
"Sales may reach 5 million next year, but it will require more sensible lending standards and stronger job creation to push beyond that," he said.
In July, distressed homes accounted for 24% of sales, down from 25% in June and 29% in July 2011. A total of 27% of July sales were all-cash, down from 29% in June and 29% in July 2011. Investors were responsible for 16% of sales, down from 19% in June and 18% in July 2011.
The number of homes for sale is down to a 6.4-month supply, which is considered a balanced market. Inventory has declined 23.8%, from a 9.3-month supply, in the last year. But the numbers mask a shortage of homes for sale in lower price ranges in some cities.
"Correctly priced homes, regardless of price range, are selling quickly these days,” NAR President Moe Veissi, a broker in Miami, said in a news release. "Fully one-third of homes purchased in July were on the market for less than a month."
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.