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Sales of existing homes jump 20% after a 3-month slump

Sales of existing homes jump 20% after a 3-month slump
Posted at 9:41 AM, Jul 22, 2020
and last updated 2020-07-22 11:41:41-04

BALTIMORE — Americans stepped up their home purchases in June by a robust 20.7% after the pandemic had caused sales to crater in the prior three months.

But the housing market could struggle to rebound further in the face of the resurgent viral outbreak and a shrinking supply of homes for sale.

Sales of existing homes rose last month to a seasonally adjusted annual rate of 4.72 million, the National Association of Realtors said. Their data showed all four regions of the country saw growth, with the west experiencing a larger increase.

The data included single-family homes, townhomes, condominiums and co-ops.

Despite the sharp monthly gain, purchases are still down 11.3% from a year ago, when homes had sold at an annual pace of 5.32 million.

Inventory remains an issues, according to the National Association of Realtors (NAR). A low number of available homes was an issue before the pandemic. Total inventory is down 18.2 percent from a year ago, according to the data.

The low supply and increasing demand could cause a spike in the price of homes.

“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply," said Lawrence Yun, NAR’s chief economist.

The median price for exisiting-home sales in June was 3.5 percent higher than a year ago. This is an ongoing trend, NAR says the median price has increased each of the last 100 months.