July 2014 saw existing housing sales post the greatest seasonally adjusted annualized rate (SAAR) thus far this year at 5.15 million units according to the National Association of Realtors® (NAR). Sales increased 2.4 percent sequentially from June (revised), though they were off 4.3 percent from July 2013.
Median price increased 4.9 percent from a year ago to $222,900 – now making a streak of 29 consecutive months of year-over-year gains.
On a 12-month moving average, the SAAR of existing home sales was down just 1.3 percent and median price was up 8.1 percent. The 12-month moving average removes the monthly noise from home sales and somewhat stabilizes the restated and updated sales numbers. By so doing it trends more clearly and consistently.
The following two graphs show the latest monthly data in both sales and median price.
Other details in the NAR release included:
- Sales of distressed housing (foreclosures and short sales) represented just 9 percent of all July 2014 closings, down from 15 percent a year ago. This is the first time since NAR commenced tracking distressed transactions in October 2008 that distressed sales were in the single-digit percentage range. NAR reported that distressed property sales in 2009 were more than one-third of all transactions (36 percent).
- Foreclosures made up 6 percent of all sales in July 2014 and sold at an average 20 percent discount when compared to non-distressed properties. A year ago, foreclosures made up 9 percent of all sales, selling at an average discount of 16 percent when compared to non-distressed properties.
- Short sales, at 3 percent of total sales numbers in July 2014, sold at an average discount of 14 percent, and are down from being 6 percent of sales volume in July 2013. A year ago, the average discount on short sales was 12 percent.
- Investors bought one out of every six sales in July 2014 (16 percent), unchanged from a year ago, but off from the 22 percent peak in February 2013. This July saw seven out of ten investors (69 percent) pay all-cash for their transactions.
- First-time homebuyers, which historically made up 40 percent of existing home sales, now tally 29 percent, unchanged from July 2013, but down from the 34 percent inked in July 2012. Obviously affordability and limited access to credit are coming into play muting some first-time entrants.
- The typical (median) number of days on the market for all properties was 48 days in July 2014, up slightly from 42 days a year ago. Short sales posted a 93 day median, foreclosures 58 days, and non-distressed homes 45 days. Four-out of ten homes (40 percent) were on the market less than one month compared to 45 percent a year ago.
Increased hiring and stable interest rates have resulted in a bump to housing this past July. While the overall growing demographic demand for housing (think population growth) continues to accelerate, many of those desiring to be homeowners are sidelined given loan qualifying issues and affordability. Many are destined to be renters, at least for the time being.
To read the entire NAR press release click http://www.realtor.org/news-releases/2014/08/existing-home-sales-continue-to-climb-in-july
Nevertheless, July existing home sales were the best of the year. Thus far.
Median price increases have muted (and that is good news).
The demand for housing will continue to grow.
All good news.