Home Sales Huge Jump
Up 24.7%
Existing-home sales continued on a strong, upward trajectory in July, marking two consecutive months of significant sales gains, according to the National Association of Realtors®:
Total existing-home sales jumped 24.7% from June to a seasonally-adjusted annual rate of 5.86 million in July. The previous record monthly increase in sales was 20.7% in June of this year.
Sales as a whole rose year-over-year, up 8.7% from a year ago (5.39 million in July 2019).
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “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.”
We would also like to add that this seems to be a supply issue as perhaps there is an exodus from certain areas and a massive influx in others? We will leave our opinions aside as to where everyone is going (more rural or south) and where everyone is leaving (Big cities, high tax zones). As we have discussed time and time again, there is a limit to taxation, but apparently we aren’t there yet, but we know damn well paying up to get into better areas, better school districts is still a hot commodity, for how long, who knows.
Back to the data:
The median existing-home price for all housing types in July was a record setting $304,100, up 8.5% from July 2019 ($280,400), as prices rose in every region.
July’s national price increase marks 101 straight months of year-over-year gains. For the first time ever, national median home prices breached the $300,000 level.
Total housing inventory at the end of July totaled 1.50 million units, down from both 2.6% in June and 21.1% from one year ago (1.90 million). (Adding to our supply theme we discussed)
First-time buyers were responsible for 34% of sales in July, down from 35% in June 2020 and up from 32% in July 2019.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in July, down from 3% in June up from 2% in June 2019.
“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” said NAR President Vince Malta, broker at Malta & Co., Inc., in San Francisco, Calif. “Admittedly, we have a way to go toward full recovery, but I have faith in our communities, the real estate industry and in NAR’s 1.4 million members, and I know collectively we will continue to mount an impressive recovery.”
We just hope that Fannie and Freddie’s new 50bp vig doesn’t put a damper in things as we know the economy is still fragile and to increase costs to the consumer like that during a time like this might not be the most humble of acts, but we get the profit protection motive given the risks.
Here is a chart from Zhedge on home prices and 30yr mortgage rates analog over the years:
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