Existing home sales in the U.S. showed a notable increase in the month of July, according to a report released by the National Association of Realtors on Wednesday, although sales still came in slightly below economist estimates.
NAR said existing home sales rose 2.3 percent to an annual rate of 4.47 million in July from 4.37 million in June. Economists had been expecting existing home sales to climb to an annual rate of 4.50 million.
The slightly smaller than expected increase in existing home sales in July came on the heels of a 5.4 percent decrease in the previous month.
Lawrence Yun, NAR chief economist, said, "Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand."
"However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions," he added.
The report also showed that the median existing-home price edged down 0.8 percent to $187,300 in July from $188,800 in June.
Nonetheless, the median existing-home price in July was up by 9.4 percent compared to the same month a year ago, reflecting the fifth consecutive month of year-over-year growth.
NAR noted that the year-over-year increase in July was the strongest since January 2006, when the median price rose 10.2 percent from a year earlier.
"Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market," Yun said.
He added, "Furthermore, the higher median price naturally means more housing contribution to economic growth."
The report also showed that housing inventories rose 1.3 percent to 2.4 million existing homes available for sale at the end of July.
The level of housing inventories in July represents 6.4 months of supply at the current sales pace, down from 6.5 months of supply in June.
NAR also said that single-family home sales rose by 2.1 percent in July, while existing condominium and co-op sales increased by 4.3 percent.
On a regional basis, existing home sales surged up by 7.4 percent in the Northeast and rose by 2.3 percent and 2.0 percent in the South and the Midwest, respectively. Existing home sales in the West were unchanged.
by RTT Staff Writer
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