June was a good month for the housing market as existing-home sales rose to their highest pace in over eight years and the national medial sales price reached its all-time high, according to new data from the National Association of Realtors (NAR).
As a result, all major regions of the U.S. experienced sales gains in June and have now risen above year-over-year levels for six months in a row.
The median existing home price for all housing types in June was $236,400, which is 6.5% above June 2014 and exceeds the peak median sales price set in July 2006 ($230,400), according to the NAR data.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condos and co-ops, rose 3.2% to a seasonally adjusted annual rate of 5.49 million in June, up from a downwardly revised 5.32 million in May.
This not only marks the ninth consecutive month where sales have increased year-over-year, but also the highest pace seen since the 5.79 million in February 2007. Compared to a year ago, home sales in June are up 9.6%.
The reason for high growth, says NAR Chief Economist Lawrence Yun, has to do with June’s solid gain in closing backed by this year’s spring buying season—the strongest since the downturn.
“Buyers have come back in force, leading to the strongest past two months in sales since early 2007,” Yun said in a written statement. “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.”
The cumulative effect of rising demand and limited housing supply helped push the national medan sales price to its all-time high.
“Limited inventory amidst strong demand continues to push home prices higher, leading to declining affordability for prospective buyers,” said Yun.
Available properties stayed on the market nearly a week less, on average, in June compared to the previous month, 34 days compared to 40 days—the shortest time since NAR began tracking in May 2011.
Meanwhile, short sales were on the market the longest at a median of 129 days in June, while foreclosures sold in 39 days and non-distressed homes took 33 days. Furthermore, 47% of homes sold in June were on the market for less than a month, which NAR notes is the highest percentage since June 2013.
“The demand for buying has really heated up this summer, leading to multiple bidders and homes selling at or above asking price,” said Chris Polychron, NAR president and executive broker with 1st Choice Realty in Hot Springs, Ark. “Furthermore, tight inventory conditions are being exacerbated by the fact that some homeowners are hesitant to sell because they’re not optimistic they’ll have adequate time to find an affordable property to move into.”
Written by Jason Oliva