Home sales rose more than expected, ending a four-month skid. On August 22, 2024, the National Association of Realtors reported a 1.3% increase in existing home sales for July. This rise is attributed to improved supply and lower mortgage rates, signaling a potential rebound in the housing market.
Key takeaways:
- Home sales increased to 3.95 million units.
- Median home prices rose to $422,600.
- Inventory of homes for sale grew by 0.8%.
- First-time buyers made up 29% of sales.
Home Sales Show Positive Growth Amid Lower Mortgage Rates
In July, existing home sales in the U.S. rose to a seasonally adjusted annual rate of 3.95 million units. This marks a 1.3% increase from the previous month, ending a streak of four months of decline. Economists had predicted a smaller increase, indicating stronger-than-expected market activity. The rise is largely due to a drop in mortgage rates, which averaged 6.49% last week, down significantly from earlier highs.
Improved Inventory and Affordability Boost Home Sales in July
July also saw a 0.8% increase in housing inventory, totaling 1.33 million units. This is a 19.8% rise compared to last year. The increase in supply has provided homebuyers with more choices, contributing to the uptick in sales. However, entry-level homes are still scarce, and new construction remains low. The housing market is slowly balancing as more homeowners list their properties due to rising insurance costs.
Factors Influencing the Recent Rise in Home Sales
Several factors have contributed to the recent increase in home sales:
- Lower mortgage rates enhancing affordability.
- Increased housing inventory providing more options.
- Stable economic conditions encouraging buyer confidence.
- First-time buyers still represent a significant portion of the market.
In conclusion, the rise in home sales in July is a positive sign for the U.S. housing market. With improving inventory and declining mortgage rates, buyers are finding more opportunities. However, challenges remain, especially for entry-level buyers.
