The National Association of Realtors announced This Week in Real Estate that after four (4) months of declines, existing-home sales increased for the second consecutive month last month. Sales of newly-constructed single-family homes also realized a slight gain. The median existing-home sales price recorded its 113th consecutive month of year-over-year gains; more than 9 straight years. Below are a few newsworthy events from the fourth week of August that influence our business:
Existing-Home Sales Climb 2.0% in July. Total existing-home sales grew 2.0% from June to a seasonally adjusted annual rate of 5.99 million in July. Sales inched up year-over-year, increasing 1.5% from a year ago (5.90 million in July 2020). “We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, NAR’s chief economist. Total housing inventory at the end of July totaled 1.32 million units, up 7.3% from June’s supply and down 12.0% from one year ago (1.50 million). Unsold inventory sits at a 2.6-month supply at the present sales pace, up slightly from the 2.5-month figure recorded in June but down from 3.1 months in July 2020. The median existing home price for all housing types in July was $359,900, up 17.8% from July 2020 ($305,600), as each region saw prices climb. This marks 113 straight months of year-over-year gains. “Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” said Yun. Existing-home sales in the West grew 3.3% posting an annual rate of 1,240,000 in July, equal to the level of a year ago. The median price in the West was $508,300, up 12.5% from July 2020.
Mortgage Rates Barely Budge, Averaging 2.87%. Mortgage rates continue to hover at all-time lows, marking the ninth consecutive week that rates have averaged below 3%. “The tug-of-war between the economic recovery and rising COVID-19 cases has left mortgage rates moving sideways over the last few weeks,” said Sam Khater, Freddie Mac’s chief economist. “Overall, rates continue to be low, with a window of opportunity for those who did not refinance under 3%.” Additional housing inventories may be on the horizon, however. The National Association of REALTORS® reported this week that more listings arrived on the market in July, a trend that could continue into the fall months. Housing inventories increased 7.3% in July compared to June. Low mortgage rates likely will remain a strong pull for potential home buyers. A rush to lock in a low rate may continue to propel the housing market. NAR predicts the 30-year fixed-rate mortgage to rise, expecting it to average 3.2% from October through December.
Purchase Mortgage Applications Rise as Treasury Yields Fall. Mortgage applications rose 1.6% on the week ending Aug. 20, moving in concert with a drop in Treasury yields, according to the latest report from the Mortgage Bankers Association. Refis ticked up 1% from the prior week and purchase mortgage applications jumped 3%, the trade group said on Wednesday. The purchase index was at its highest level since early July, though it was still down 16% from the same time last year. “Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity,” said Joel Kan, the MBA’s associate vice president of economic and industry forecasting. “Mortgage rates slightly declined as a result, with the 30-year fixed-rate decreasing for the first time in three weeks. Lower rates led to an increase in refinance applications, with government loan applications jumping 10 percent to the highest level since May 2021.”
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