According to recent data from the National Association of Realtors, existing home sales increased 6.5 percent to a seasonally adjusted annual rate of 5.39 million during the month of July. This spike continues a 25 month trend of year-over-year double digit increases of median home prices, factoring in single-family homes, townhomes, condominiums and co-ops.
Meanwhile from a buyer’s perspective, a 30 year, conventional, fixed-rate mortgage rose .3 percent from June and now stands at 4.37 percent. Unfortunately, this is the highest rate in past two years, “This increase pushed some buyers off the sidelines” said NAR Chief Economist Lawrence Yun. He continued by stating “The initial rise in interest rates provided strong incentive for closing deals. However, further rate increases will diminish the pool of eligible buyers.”
Here are just a few more highlights from the National Association of Realtors Report:
- Total housing inventory recorded at the end of July shows a rise of 5.6 percent making a total of 2.28 million homes for sale
- The national media existing home price for all housing types was $213,500 in July
- Foreclosures and short-sales accounted for 15 percent of July sales
- The median time a house was on the market rose to 42 days in July
But there is good news! According to Lawrence Yun, NAR chief economist, “Although housing affordability conditions will become less attractive, jobs are being added to the economy, and mortgage underwriting standards should normalize over time from current stringent conditions as default rates fall.” In other words, there are factors that will alleviate the pressure of higher mortgage rates and will help continue the nation’s housing recovery.