Total existing home sales rose 1.1% in June to a seasonally adjusted annual rate of 5.57 million, from a downwardly revised 5.51 million in May, according to the National Association of Realtors. Sales are up 3% from June of 2015, and are currently at their highest annual pace since February of 2007.
June marks the fourth consecutive month of sales gains and ends a solid first half of 2016, said Lawrence Yun, NAR chief economist.
“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” Yun said. “Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases. Looking ahead, it's unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing.”
The median existing home price in June was $247,700, a 4.8% increase from June of last year. June marks the 52nd consecutive month of annual price gains, according to the NAR.
Housing inventory, meanwhile, was down, dropping 0.9% from May to 2.12 million existing homes available for sale. That’s a 5.8% drop from the 2.25 million available in June of 2015. Unsold inventory is at a 4.6-month supply at the current sales pace, according to the NAR.
The share of first-time buyers hit 33% in June, its highest level since July of 2012.
“The modest bump in June sales to first-time buyers can be attributed to mortgage rates near all-time lows and perhaps a hopeful indication that more affordable, lower-priced homes are beginning to make their way onto the market,” Yun said. “The odds of closing on a home are definitely higher right now for first-time buyers living in metro areas with tamer price growth and greater entry-level supply — particularly areas in the Midwest and parts of the South.”
Existing home sales increased for the fourth straight month in June, driven largely by the greatest share of sales to first-time buyers in nearly four years.