Extending record gains from June, “the housing market is now booming,” NAR Chief Economist Lawrence Yun says.
Existing-home sales soared 24.7% in July, outpacing their record growth of 20.7% in June, when the nation’s economic reopening ignited homebuying activity, the National Association of REALTORS® reported Friday. Now 8.7% higher year over year, the strong rise in existing-home sales—including single-family homes, townhomes, condominiums, and co-ops—is fueling optimism in the real estate market through the rest of the year.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” says NAR Chief Economist Lawrence Yun. “With the sizable shift in remote work, current homeowners are looking for larger homes—and this will lead to a secondary level of demand, even into 2021.”
Home prices, too, are reaching new all-time highs, with the national median existing-home price hitting $304,100 in July—the first time it’s ever broken $300,000, according to NAR. However, low inventory stands to limit gains moving forward. Total housing inventory at the end of July totaled 1.5 million units, down 21.1% year over year. “The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” Yun says. “More homes need to be built.”
Other important findings from NAR’s July housing report include:
- Properties are selling fast. Sold homes in July typically spent 22 days on the market, down from 24 in June.
- Fewer first-timers are in the market. The share of first-time buyers was 34%, down slightly from 35% in June.
- Investors are holding steady. The share of all-cash sales was 16%, unchanged from June.
- Distressed sales are down. Foreclosures and short sales represented less than 1% of total sales, falling from 3% in June.
- Condo prices are increasing. The median existing condo price was $270,100 in July, an increase of 6.4% from a year ago.
“Luxury homes in the suburbs are attracting buyers after having lagged the broader market for the past couple of years,” Yun says. “Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home—including an extra room for a home office.”
July marked the second consecutive month that year-over-year sales and median home prices grew in each of the four major regions of the country, NAR reported.
- Northeast: Sales up 30.6%, median home price ($317,800) up 4%.
- Midwest: Sales up 27.5%, median home price ($244,500) up 8%.
- South: Sales up 19.4%, median home price ($268,500), up 9.9%.
- West: Sales up 30.5%, median home price ($453,800) up 11.3%.