July 22, 2010
Selling a house got a lot harder last month, as a federal tax credit for buyers finally expired. The pace of new construction also hit the skids.
Sales of existing homes fell 5.1 percent in June from the month before, according to the National Association of Realtors. Compared with June 2009, however, sales were up nearly 10 percent.
Earlier this week, the Commerce Department reported construction of new homes fell to an eight-month low in June. Housing starts dropped five percent from May -- the lowest rate since last October.
"June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months," said Lawrence Yun, NAR's chief economist. "Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels."
The national median existing-home price for all housing types was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009.
A parallel NAR practitioner survey shows first-time buyers purchased 43 percent of homes in June, versus 46 percent in May. Investors accounted for 13 percent of sales in June, little changed from 14 percent in May; the remaining purchases were by repeat buyers. All-cash sales were at 24 percent in June compared with 25 percent in May.
Total housing inventory at the end of June rose 2.5 percent to 3.99 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace; there was an 8.3-month supply in May.
Too many homes for sale
"The supply of homes on the market is higher than we'd like to see. But home prices are still holding their ground because prices had already overcorrected in many local markets," Yun said. "Raw unsold inventory remains 12.7 percent below the record of 4.58 million in July 2008."
Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in June in comparison with June 2009. In addition, existing single-family home sales rose in 12 of the 19 areas from a year ago while two were unchanged.
Existing condominium and co-op sales slipped 1.5 percent to a seasonally adjusted annual rate of 670,000 in June from 680,000 in May, but are 20.5 percent higher than the 556,000-unit pace in June 2009. The median existing condo price5 was $180,100 in June, which is 1.4 percent below a year ago.
Northeast sales remain strong
Regionally, existing-home sales in the Northeast rose 7.9 percent to an annual level of 960,000 in June and are 17.1 percent above June 2009. The median price in the Northeast was $244,300, down 1.2 percent from a year ago.
Existing-home sales in the Midwest dropped 7.5 percent in June to a pace of 1.23 million but are 11.8 percent higher than a year ago. The median price in the Midwest was $155,900, down 0.1 percent from June 2009.
In the South, existing-home sales fell 6.5 percent to an annual level of 2.01 million in June but are 11.0 percent above June 2009. The median price in the South was $163,600, unchanged from a year ago.
Existing-home sales in the West dropped 9.3 percent to an annual pace of 1.17 million in June but are 0.9 percent higher than a year ago. The median price in the West was $221,800, up 1.5 percent from June 2009.
