Total existing home sales jumped 2.4% in July to a seasonally adjusted annual rate of 5.15 million, according to the National Association of Realtors. That’s the highest pace of 2014, but still below last year’s 5.38 million peak.
“The number of houses for sale is higher than a year ago and tamer price increases are giving prospective buyers less hesitation about entering the market,” said NAR chief economist Lawrence Yun. “More people are buying homes compared to earlier in the year, and this trend should continue with interest rates remaining low and apartment rents on the rise.”
But affordability is likely to keep shrinking, Yun warned.
“Although interest rates have fallen in recent months, median family incomes are still lagging behind price gains, and mortgage rates will inevitably rise with the upcoming changes in monetary policy,” he said.
Total housing inventory at the end of July was up 3.5% to 2.37 million existing homes, a 5.5-month supply at the current pace. Distressed home sales accounted for 9% of July sales. That’s down from 15% last July, and marks the first time distressed home sales have fallen into single digits since NAR began tracking them in 2008.
Existing home sales hit their best annual pace of the year in July, while distressed sales continued to decline.