-Existing Home Sales Surge by 24.7% to a 5.86 Mln Rate, High Since 2006
-Supply Continues To Contract, Lifting Prices To Record High
-Markit Flash Data Rise, Contradicting Regional Data to Date
By Kevin Kastner
WASHINGTON (MaceNews) – U.S. existing home sales surged to a 14-year high in July on record low mortgage rates and an increased desire for single-family homes.
National Association of Realtors Chief Economist Lawrence Yun said that the housing sector has moved passed the recovery phase from the exceptionally soft spring and has moved into a “booming phase.”
Data released Friday by the National Association of Realtors showed that overall existing home sales rose by a record 24.7% to a 5.86 million annual rate in July, well above expectations for a 5.40 million rate and the strongest pace since 2006 during the housing boom. Sales rose to a 4.70 million rate in June.
Single-family existing home sales rose by 23.9%, while condo sales jumped by 31.8%.
Yun noted that low mortgage rates are compelling upper-income workers to upgrade their homes. These workers can generally telecommute, meaning they are able to look for larger homes further away from the office.
The weekly Mortgage Bankers Association, released earlier on Wednesday, showed that mortgage rates ticked up to 3.13% from a record low 3.06% rate in the previous week. Low rates continue to support mortgage applications for both new and existing homes.
There were sales gains in all four regions of the country for the second straight month, with the South region leading the gains despite some concerns about a COVID-19 resurgence.
Inventory of homes for sales fell by 2.6% in July and was down 21.1% from its level a year ago. When combined with the sales surge, the month’s supply fell to 3.1 months from 3.9 months in June and 4.2 months a year ago.
The NAR said the time on market stands at an exceptionally low 22 days, with 68% of homes on the market less than a month in July.
New home construction rose sharply in July, based on data released on Tuesday, which should further increase the supply of new homes for sale and allow current owners to trade up and put their existing homes on the market.
The median sales price of existing home rose by 3.3% in July to $304,100. Prices were up 8.5% year/year.
Earlier Friday, the flash Markit estimate for manufacturing conditions rose to 53.6 in August from 50.9 in July. The services index increased to 54.8 from 50.0 in July, lifting the composite index to 54.7 from 50.3. All three measures were the highest in over a year.
The Markit data contrast with the two regional releases to this point. The Empire State manufacturing index fell to 3.7 from 17.2 and the Philadelphia Fed manufacturing index fell to 17.2 from 24.1, both indicating slower growth.
Released at the same time as existing home sales, the BLS reported that unemployment rates declined in 30 states and rose in nine states. The national unemployment rate slipped to 10.2% from 11.1% in June.
Among the nine states that saw increases, New York, Connecticut, and New Mexico reached their highest points on record, suggesting the recovery is now less uniform than it was in May and June.
Payrolls rose in 40 states and only fell in New Mexico. National payrolls rose by 1.763 million in July.
The largest payrolls gains were in New York and California, while the largest gain by percentage was in New Jersey.
—
Contact this reporter: kevin@macenews.com.
Content may appear first or exclusively on the Mace News premium service. For real-time delivery contact tony@macenews.com. Twitter headlines @macenewsmacro.