Northeast Home Sales Rise Nearly 2% in June; Sales Lower Nationwide

Real Estate In-Depth | July 24, 2019

WASHINGTON—Existing-home sales in the U.S. weakened in June falling less than 2% after a previous month of sales gains, the National Association of Realtors reported on July 23.

Two of the four major U.S. regions recorded minor sales jumps, including the Northeast (+1.5%), while the other two—the South and the West—experienced greater declines last month.

Total existing-home sales, condominiums and co-ops, dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June. Sales as a whole were down 2.2% from a year ago (5.39 million in June 2018).

“Home sales are running at a pace similar to 2015 levels—even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” says Lawrence Yun, NAR’s chief economist. Yun says the nation is in the midst of a housing shortage and much more inventory is needed. “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” he said.

Yun said other factors could be contributing to the low number of sales. “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure. It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive,” he said.

The median existing-home price for all housing types in June reached an all-time high of $285,700, up 4.3% from June 2018 ($273,800). June’s price increase marks the 88th straight month of year-over-year gains.

Total housing inventory at the end of June increased to 1.93 million, up from 1.91 million existing-homes available for sale in May, but unchanged from the level of one year ago. Unsold inventory is at a 4.4-month supply at the current sales pace, up from the 4.3-month supply recorded in both May and in June 2018.

Properties typically remained on the market for 27 days in June, up from 26 days in May and in June of 2018. A total of 56% of homes sold in June were on the market for less than a month.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 3.80% in June, down from 4.07% in May. The average commitment rate across all of 2018 was 4.54%.

“Historically, these rates are incredibly attractive,” said NAR President John Smaby, a second-generation Realtor from Edina, MN and broker at Edina Realty. “Securing and locking in on a mortgage now—given the current, favorable conditions— is a decision that will pay off for years to come.”

First-time buyers were responsible for 35% of sales in June, up from 32% the month prior and up from the 31% recorded in June 2018. NAR’s 2018 Profile of Home Buyers and Sellers—released in late 2018—revealed that the annual share of first-time buyers was 33%.

As the share of first-time buyers rose, individual investors, who account for many cash sales, purchased 10% of homes in June, down from 13% recorded in both May 2019 and June 2018. All-cash sales accounted for 16% of transactions in June, down from May and a year ago (19% and 22%, respectively).

Distressed sales—foreclosures and short sales—represented 2% of sales in June, unchanged from May but down from 3% in June 2018. Less than 1% of June 2019 sales were short sales.

Regional Breakdown

Compared to May, June existing-home sales rose slightly in the Northeast and Midwest, but decreased in the South and West regions. Sales in all regions were still lower compared to one year ago, with the most significant declines in the Northeast and West. Median home prices rose in all regions, with the highest gains in the Midwest and South.

June existing-home sale numbers in the Northeast increased 1.5% to an annual rate of 680,000, a 4.2% decline from a year ago. The median price in the Northeast was $321,200, up 4.8% from June 2018.

In the Midwest, existing-home sales inched up 1.6% to an annual rate of 1.25 million, which was a 1.6% decline from June 2018. The median price in the Midwest was $230,400, a 6.7% jump from a year ago.

Existing-home sales in the South fell 3.4% to an annual rate of 2.25 million in June, down 0.4% from a year ago. The median price in the South was $248,600, up 4.9% from one year ago.

Existing-home sales in the West fell 3.5% to an annual rate of 1.09 million in June, 5.2% below a year ago. The median price in the West was $410,400, up 2.3% from June 2018.

Single-family and Condo/Co-op Sales

Single-family home sales sat at a seasonally adjusted annual rate of 4.69 million in June, down from 4.76 million in May and down 1.7% from 4.77 million a year ago. The median existing single-family home price was $288,900 in June, up 4.5% from June 2018.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 580,000 units in June, down 3.3% from the prior month and down 6.5% from a year ago. The median existing condo price was $260,100 in June, which was up 2.8% from a year ago.