Home sales rose the most in July as lower mortgage rates continued to fuel a residential market that is a major source of fuel for economic recovery.
Closing transactions rose 24.7% from the previous month to an annual rate of 5.86 million. This is the strongest pace since late 2006 and reflects broad gains in the US, according to data released by the National Association of Realtors on Friday. The median estimate in a Bloomberg poll of economists put the rate at 5.41 million. Unadjusted, prices rose by 8.5% year-on-year to their highest level in history.
"The real estate market is past the recovery phase and is currently in a booming stage," said Lawrence Yun, chief economist of NAR, on a call with reporters. "Certainly record-low mortgage rates will bring more buyers to the market."
Cheaper borrowing costs, pent-up demand and greater interest in the suburban markets after the pandemic-induced standstill at the beginning of the year have provided a lot of momentum in residential construction so far. At the same time, lean inventories, higher asking prices and the coronavirus itself represent hurdles to further increasing profits.
"With the significant shift in remote working, current homeowners are looking for larger homes and that will result in secondary demand through 2021," Yun said in a statement.
Last month, 1.5 million existing homes were put up for sale, a 21.1% decrease from July 2019, the 14th consecutive decrease year over year. It was the leanest offering since July.
The number of homes for sale at the current rate of sale would be 3.1 months. Anything under five months is considered a narrow market.
In July, the properties stayed on the market for an average of 22 days, the shortest time in history. The median home price rose to an all-time high of $ 304,100 last month, compared to $ 280,400 last year.
Previously owned single-family home purchases rose 23.9% and condominium sales rose nearly 32%, according to NAR data.
Existing home sales rose in all four US regions in July, including a 30.5% increase in the West and a 19.4% increase in the South, the largest US region. Purchases rose 27.5% in the Midwest and 30.6% in the Northeast.
Previous home sales account for approximately 90% of US tractions and are billed at the time the contract is signed. The sales data for new homes in July will be released by the commercial department on Tuesday.