In July, closed sales of previously owned homes increased by 1.3% compared to June, reaching an annualized rate of 3.95 million units. This marked the first increase in five months, although sales were still 2.5% lower than the same time last year. The biggest gains were seen in the Northeast, where prices also rose the most. Lawrence Yun, NAR’s chief economist, noted that home sales are still sluggish overall, but consumers are benefiting from greater choices and improved affordability due to lower interest rates.
The increase in sales can be attributed to contracts likely signed in May and June when mortgage rates were higher. Mortgage rates began to drop in July and are now around 6.5%. All-cash offers made up 27% of July sales, higher than the historical average.
Despite an increase in supply, home prices continued to rise in July, with the median price reaching $442,600, up 4.2% from the previous year. First-time buyers made up 29% of sales, with demand starting to pick up due to lower interest rates.
A report from Redfin found an increase in requests for tours and other buying services, indicating rising demand in the market. Overall, the housing market is showing signs of improvement, with increased sales and affordability, although challenges remain due to rising prices and lower first-time buyer participation compared to historical norms.
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