Existing home sales rise for fourth straight month
Bolstered by low-priced home and foreclosure sales, U.S. existing home sales rose 7.2 percent in July to a seasonally-adjusted annual rate to 5.24 million units, the National Association of Realtors announced Friday. That's the highest level for existing home sales since August 2007, roughly one quarter before the U.S. recession started in December 2007.
Economists surveyed by Bloomberg News had expected July existing home sales to total a 5.0-million-unit annualized rate. Sales had totaled a 4.89-million-unit annual pace in June, and a 4.77-million-unit annual pace in May. Existing home sales are also up five percent in the past year.
Meanwhile, inventories of existing homes remained flat in July, totaling a 9.4 supply at the current sales pace. Even so, that's still down from a 9.8-month supply in May, and a 10.1-month supply in April. Economists say a healthy, normal existing home sale market has a three to five month supply of homes available for sale.
Median home price falls again
In addition, the U.S. median home price for all types of housing fell to $178,400 in July, a 15.1 percent plunge from the same period a year ago. Further, the median sale price for a single-family home fell 14.6 percent to $178,300; condos declined 18.9 percent to $178,800.
What's continues to push the median home price lower, and also aid sales? Sales of distressed properties, which account for 31 percent of sales in July, the same percentage as in June. Still, the 31 percent figure represents an improvement from the 45-50 percent distressed sales ratios recorded earlier this year.
Lawrence Yun, the NAR's chief economist, made the case that the U.S. housing market's worst quarters are behind it.
"The housing market has decisively turned for the better," Yun said. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."
However, other economists and federal government statisticians caution that the summer season often distorts real estate data to the upside, due to the large number of families who choose to move during this period, when school is not in session. Hence, a more accurate gauge of the housing market trend is a six to nine month period that includes data from non-summer sales.
By region, in July existing home sales surged 13.4 percent in the Northeast, where the median price fell 15.0 percent to $236,700 compared to a year ago; they rose 10.9 percent in the Midwest, where the median price fell 5.9 percent to $157,200; in the South, sales rose 7.1 percent, with the median price dropping 7.1 percent to $164,500; in the West, sales dipped 1.7 percent, with the median price plunging 28.0 percent to $202,300.
Housing Analysis: Record yet another modest positive for the U.S. housing sector. Existing homes sales are not advancing at a robust pace, but they've now risen for four months. We're going to cite the summer caveat -- a lot of families move in the summer when school is out, who would otherwise not move -- and await fall data before declaring a sector recovery. But given the sector's horrific recession, the four-month run is a modest achievement. And it's another sign that the U.S. economic recovery is underway.