Unexpected Rise in Existing Home Sales Marks July amid Evolving Market Conditions
July witnessed a surprising 2% growth in sales of previously owned homes compared to June, reaching an annualized pace of 4.01 million units on a seasonally adjusted basis.This outcome exceeded market forecasts, which had predicted a slight decline. Year-over-year, sales increased modestly by 0.8%, reflecting persistent buyer interest despite ongoing economic challenges.
How Mortgage Rate Fluctuations shaped Recent Home Purchases
The surge in closed transactions during July largely reflects agreements made in May and June when mortgage rates were trending downward after peaking earlier in the spring.The average rate for a 30-year fixed mortgage briefly surpassed 7% at the start of May but eased to around 6.67% by late June, encouraging more buyers to finalize deals.
Inventory Expansion Relieves Some Pressure on Housing Costs
The housing supply expanded considerably with approximately 1.55 million homes listed for sale at the end of July-a nearly 16% increase compared to the same month last year. This inventory level corresponds to about a 4.6-month supply based on current sales velocity, moving closer toward what experts consider balanced market conditions near six months’ worth of inventory. Although this is the largest stockpile since mid-2020, it still falls short of pre-pandemic availability.
Price Movements Indicate Market Stabilization
The median price for existing homes sold during July hit $422,400-setting an all-time high for that month-with only slight growth of 0.2% from one year prior. While home prices have steadily climbed over recent years, this deceleration hints at improving affordability as wage gains begin outpacing price increases.
“Income growth is now surpassing home price appreciation,” noted industry economists recently. “This gradual betterment in affordability is broadening buyer options and stimulating demand.”
Differentiated Trends Across Housing Segments
- High-End Properties Flourish: Homes priced above $1 million experienced strong momentum with sales rising over 7% compared to last year’s figures.
- Lower-Priced Markets Encounter Headwinds: Sales within the $100,000-$250,000 bracket declined marginally by about one-tenth of one percent; simultaneously occurring properties under $100,000 saw sharper drops nearing eight percent.
- Southeastern Condo Sales Gain Traction: Condominium purchases increased notably across southern states where prices have softened recently.
Selling Periods Lengthen as Buyer Demographics Shift
The average time required to sell an existing home extended from roughly three and a half weeks (24 days) last year up to nearly four weeks (28 days) this July-reflecting slower turnover amid greater selection available for buyers.
The share of first-time buyers dipped slightly as well: thay accounted for approximately 28% of all transactions versus around 29-30% during comparable past periods.
An Expanding role for Investors and Cash Buyers
A rising proportion-20%-of home purchases were made by investors this July compared with just over one-eighth (13%) twelve months earlier; this shift likely correlates with increased housing stock providing more opportunities beyond traditional owner-occupiers’ reach.
Certainly notable is the continued popularity of all-cash deals: these rose from about one-quarter (27%) last year up toward nearly one-third (31%) currently-a historically elevated figure possibly driven by accumulated wealth through equities or other real estate investments fueling cash reserves.
