Existing home sales were at a seasonally-adjusted annualized rate (SAAR) of 5.08 million dwellings in June 2013, as reported by the National Association of Realtors®(NAR). Transactions stayed the course with closings up 15.2 percent compared to June 2012, but were down sequentially from May 2013 by 1.2 percent (not necessarily a trend, just the noise of monthly data, in my opinion). The median home price rose 13.5 percent in the same time period to $214,200. Prices have now risen 16 consecutive months in a row.
June 2013 sales of existing homes, on a 12-month moving average, saw a year-over-year increase from a SAAR of 4.42 million in 2012 to 4.91 million in 2013—a gain of 11.1 percent. From the trough of 4 million sales (again on a 12-month moving average) reached in June 2009, the current pace of is up 22.5 percent. The 12-month moving average median price, which peaked at $224,400 in July 2006, plunged to a low of $164,200 in July 2012. Since July 2012, the average of monthly median prices has increased 12.9 percent to $185,360.
The interaction between supply and demand are shown in the following graph, depicting 12-month moving averages. As the number of sales continues to escalate, likewise will prices.
Other statistics from the NAR release include:
- All-cash sales made up 31 percent of the closings in June 2013, down from 33 percent in May 2013 but up from 29 percent in June 2012
- Individual investors made up 17 percent of June home sales compared to 18 percent in May 2013 and 19 percent in June 2012. Rising home values may be muting investor demand.
- First-time home buyers, the essential catalyst for the move-up market, absorbed 29 percent of June 2013 sales, versus 28 percent in May of this year and 32 percent a year ago. Typically, first-time buyers represent roughly 40 percent of the market, with the shortfall being attributed to minimal inventory of lower-priced homes and continued tight credit issues and related stringent mortgage underwriting.
- Distressed home sales (foreclosures and short sales) were the lowest recorded since data commenced being collected in October 2008, and made up 15 percent of all transactions. Short sales represented 7 percent of sales volume while foreclosures accounted for 8 percent. Prices compared to non-distressed real estate were discounted 16 for foreclosures while short sales were 13 percent less.
- Time on the market for June sales was a median 37 days, down from 41 in May 2013 and 70 days in June 2012. Median days on the market for short sales in June was 68 days and 39 days for foreclosures. Non-distressed sales had a median 35 days on the market.
- The number of homes listed for sale at the end of June 2013 was 2.19 million homes, which at the current pace of closings equates to 5.2 months inventory (with six months considered normal). While up from 5.0 months inventory from May 2013, it was down substantially from a 6.4 month supply a year ago. As home prices rise, added potential sellers see a more favorable opportunity to list their home for sale.
To read the NAR press release and download all support data, click here.
The market continues to work through distressed housing, with rising prices curing many underwater borrowers. Sales continue to gain as do prices.
Good news for all.