Fifty-one percent of homes sold in July were on the market for less than a month, according to the National Association of REALTORS®’ existing-home sales report, released Thursday.
Properties typically stayed on the market for 30 days in July, down from 36 days a year ago.
“Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace” for existing-home sales last month, says Lawrence Yun, NAR’s chief economist. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
Total existing-home sales—including completed transactions for single-family homes, townhomes, condos, and co-ops—decreased 1.3 percent to a seasonally adjusted annual rate of 5.44 million in July. Last month’s sale pace is the lowest of 2017, but it is still 2.1 percent above a year ago.
Large declines last month in existing-home sales in the Northeast and Midwest offset sale increases in the South and West, NAR reported.
“July was the fourth consecutive month that the typical listing went under contract in under one month,” says Yun. “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new-home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”
Home prices across the country continued to rise last month. NAR reported that the median existing-home price for all housing types in July was $258,300, up 6.2 percent from a year ago.
Meanwhile, inventories of homes for sale remain tight. The total housing inventory at the end of July dropped 1 percent to 1.92 million existing homes available for sale. Inventories are now 9 percent lower than a year ago (2.11 million). Unsold inventory is at a 4.2-month supply at the current sales pace, down from a 4.8-month supply a year ago.
“Home prices are still rising above incomes and way too fast in many markets,” Yun says. “REALTORS® continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”