Existing-home sales across the country declined in June but have stayed well above year-ago levels for the past two years, while the median price shows seven straight months of double-digit year-over-year increases, according to the National Association of Realtors.
Total sales, which are completed transactions that include single-family homes, town homes, condominiums and co-ops, dipped 1.2% to a seasonally adjusted annual rate of 5.08 million in June from a downwardly revised 5.14 million in May, but are 15.2% higher than the 4.41 million-unit level in June 2012.
Lawrence Yun, NAR chief economist, said there is enough momentum in the market, even with higher interest rates.
"Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand," he said. "However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 4.07% in June from 3.54% in May, and is the highest since October 2011 when it was also 4.07%. The rate was 3.68% in June 2012.
Total housing inventory at the end of June rose 1.9% to 2.19 million existing homes available for sale, which represents a 5.2-month supply at the current sales pace, up from 5.0 months in May. Listed inventory remains 7.6% below a year ago, when there was a 6.4-month supply.
"Inventory conditions will continue to broadly favor sellers and contribute to above-normal price growth," Yun remarked.
The national median existing-home price for all housing types was $214,200 in June, up 13.5% from June 2012. This marks 16 consecutive months of year-over-year price increases, which last occurred from February 2005 to May 2006.
Distressed homes, foreclosures and short sales, were 15% of June sales, down from 18% in May, and are the lowest share since monthly tracking began in October 2008. They were 26% in June 2012. The decline in sales of distressed homes, which typically sell at a reduced price, accounts for some of the price growth.
Eight percent of June sales were foreclosures, and 7% were short sales. Foreclosures sold for an average discount of 16% below market value in June, while short sales were discounted 13%.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said some owners who were hurt by the downturn are now in the market.
"Rising values have improved the position of homeowners, and 16% of Realtors surveyed in June report they worked with a client that previously had an underwater mortgage," he said.
"Of those previously underwater owners, 53% were planning to buy another home and 22% intend to rent, but 25% weren't sure what they'd do," he added. "In addition, 47% of Realtors report they have potential sellers who are waiting for additional price appreciation before they sell."
The median time on the market for all homes was 37 days in June, down from 41 days in May, and is 47% faster than the 70 days on the market in June 2012. Short sales were on the market for a median of 68 days, while foreclosures typically sold in 39 days and non-distressed homes took 35 days. Some 47% of all homes sold in June were on the market for less than a month.
First-time buyers accounted for 29% of purchases in June, compared with 28% in May and 32% in June 2012.
"First-time buyers should be closer to 40% of the market, but they're held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S.," Yun said.
All-cash sales made up 31% of transactions in June, down from 33% in May. They were 29% in June 2012.
Individual investors, who account for many cash sales, purchased 17% of homes in June, down from 18% in May and 19% in June 2012.
Single-family home sales slipped 1.1% to a seasonally adjusted annual rate of 4.50 million in June from 4.55 million in May, but are 14.5% above the 3.93 million-unit pace in June 2012. The median existing single-family home price was $214,700 in June, which is 13.2% above a year ago.
Existing condominium and co-op sales fell 1.7% to an annualized rate of 580,000 units in June from 590,000 in May, but are 20.8% higher than the 480,000-unit level a year ago. The median existing condo price was $210,200 in June, up 15.4% from June 2012.
Regionally, existing-home sales in the West declined 1.6% to a pace of 1.21 million in June but are 11.0% above a year ago. With ongoing supply constraints, the median price in the West was $282,000, a jump of 19.9% from June 2012.
Existing-home sales in the Northeast declined 1.6% to an annual rate of 630,000 in June but are 16.7% above June 2012. The median price in the Northeast was $270,400, which is 6.8% above a year ago.
Existing-home sales in the Midwest were unchanged in June at a pace of 1.21 million, and are 17.5% higher than a year ago. The median price in the Midwest was $170,100, up 8.9% from June 2012.
In the South, existing-home sales slipped 1.5% to an annual level of 2.03 million in June but are 16.0% above June 2012. The median price in the South was $186,300, which is 13.7% above a year ago.