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Existing Home Sales Surging07-28-15 | News

Existing Home Sales Surging

With close to 5.5 million existing homes sold in June, buyers are returning in droves to the housing market, the National Association of Realtors said.

Sales of existing homes reached a level in June not seen in more than eight years, the National Association of Realtors reports.

The number of transactions rose 3.2 percent to 5.49 million units for the month, compared to 5.32 million in May. Sales have increased on a year-to-year basis for nine straight months, and are 9.6 percent above the mark in June 2014, when 5.01 million homes were sold.

The NAR data includes single-family homes, townhomes, condominiums and co-ops, and is based on transaction closings reported in Multiple Listing Services.

"Buyers have come back in force, leading to the strongest past two months in sales since early 2007," Lawrence Yun, NAR chief economist, said.

Sales of single-family homes alone jumped 2.8 percent to 4.84 million units in June, compared to 4.71 million in the previous month. Single-family home sales are now 9.8 percent above the 4.41 million sold a year ago.

"This wave of demand is being fueled by a year-plus of steady job growth and an improving economy that's giving more households the financial wherewithal and incentive to buy," Yun added.

Rising demand and limited supply have pushed median home prices to all-time highs, according to the NAR.

The median price for all existing homes in June was $236,400, or 6.5 percent above the level in June 2014. This surpasses the peak median sales price set in July 2006 of $230,400. June's price increase also marks the 40th consecutive month of gains on a year-to-year basis.

"June's sales were also likely propelled by the spring's initial phase of rising mortgage rates, which usually prods some prospective buyers to buy now rather than wait until later when borrowing costs could be higher," Yun said.

The number of first-time buyers fell to 30 percent in June from 32 percent in May, but remained at or above 30 percent for the fourth month in a row. A year ago, first-time buyers comprised 28 percent of all buyers.

What follows is a regional breakdown:

• Northeast "?u a 4.3 percent jump for the month to 720,000 units, 12.5 percent above a year ago. The median price is $281,200, or 3.9 percent higher than June 2014.

• Midwest "?u a 4.7 percent climb to 1.33 million units in June, 12.7 percent above the level of a year ago. The median price is $190,000, up 7.2 percent from a year ago.

• South "?u a 2.3 percent rise to 2.20 million units for the month, 7.3 percent higher than June 2014. The median price is $205,000, up 7.2 percent on a year-to-year basis.

• West "?u a 2.5 percent hike to 1.24 million units in June, 8.8 percent above a year ago. The median price is $328,900, or 9.9 percent above the year-ago level.