NAFCU chief economist Curt Long said Monday he expects existing home sales to remain stable this year, mostly limited by supply.
His comments came after the National Association of Realtors (NAR) reported that existing home sales rose 2% from June through July to a seasonally adjusted annual rate of 5.99 million homes.
“Sales of existing homes increased for the second consecutive month, fueled by low rates and a recovery in the labor market,” Long said. “Demand is very strong and although supply is still tight, housing construction has resumed. “
The NAR report showed that sales of single-family homes, townhouses, condominiums and co-ops in July were 1.5% higher than in July 2020.
There were 1.32 million homes on the market on July 31, up 7.3% from the previous month and down 12% from the previous year. The supply of unsold homes should last 2.6 months at the current pace of sales, up slightly from the stock of 2.5 months in June but down from 3.1 months in July 2020.
“We are seeing stocks start to rise, which will reduce the intensity of multiple offers,” said Lawrence Yun, chief economist for NAR.
“Much of the growth in home sales is still happening in high-end markets, while mid-to-lower level areas aren’t seeing as much growth because there are still too few starter homes available,” Yun said.
The median price of existing homes for all housing types in July was $ 359,900, up 17.8% from July 2020, with gains in every region.
“While we shouldn’t expect home prices to drop in the coming months, it is possible that they will level off as inventories continue to gradually improve,” Yun said.
Long, of the NAFCU, said that the slowdown in price increases worried some fringe owners that they could miss current record prices, “generating more ads from sellers who want to take advantage of the market while there is still favorable”.
On the construction side, Long said housing starts fell 7% this month while permits were up 2.6%.
“Home builders have also sold more homes than they can build and have had to suspend sales to catch up,” he said. “Interest rates are expected to remain very low over the medium term, increasing demand.”
NAR found that homes typically remained on the market for 17 days in July, unchanged from June and down from 22 days in July 2020.
First-time buyers represented 30% of sales in July, against 31% in June and 34% in July 2020.
Individual investors or buyers of second homes, which represent many cash sales, bought 15% of homes in July, against 14% in June but even with 15% from July 2020. Cash sales represented 23% transactions in July. , even with June and up to 16% in July 2020.
Callahan & Associates, the cooperative credit society of Washington, DC, estimated on Aug. 11 that credit unions issued $ 81 billion in first mortgage loans in the second quarter, up from $ 74 million in the first quarter and roughly the same as in the second quarter of 2020..
Among all lenders, second-quarter mortgage origination was $ 460 billion, up 44% from the first quarter and 32% from a year earlier, according to the Mortgage Bankers Association.
The Aug. 22 MBA forecast showed that buy-ins fell 9.3% between the second and third quarters and rose 3.8% in the fourth quarter. For the year, the MBA purchasing forecast will increase 14% to $ 1.63 trillion.