National Association of REALTORS® reports a 2.0% monthly increase, with improved affordability and rising inventory drawing in buyers.
The U.S. housing market is showing signs of a slow but steady recovery, with existing-home sales increasing by 2.0% in July, according to a new report from the National Association of REALTORS® (NAR). The monthly rise, which brought the seasonally adjusted annual rate to 4.01 million units, marks an increase of 0.8% compared to a year ago.
The improved market conditions are being driven by a slight uptick in housing affordability. “The ever-so-slight improvement in housing affordability is inching up home sales,” said NAR Chief Economist Lawrence Yun. He noted that wage growth is now comfortably outpacing home price growth, giving buyers more purchasing power.
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Inventory levels also saw a modest increase, with unsold inventory rising by 0.6% to 1.55 million units, a 4.6-month supply. This is the highest inventory level since May 2020 and provides buyers with more options and leverage in negotiations. As a result, Yun stated, “Homebuyers are in the best position in more than five years to find the right home and negotiate for a better price.”
Despite the overall positive trend, the market’s performance varied by region. Month-over-month sales grew in the Northeast, South, and West, while the Midwest saw a slight decline. Year-over-year sales were up in the Northeast, South, and Midwest, but fell in the West.
The report also highlighted other key market indicators:
- Median Home Price: The median existing-home price rose to $422,400, a modest 0.2% increase from the previous year. This marks the 25th consecutive month of year-over-year price increases.
- Time on Market: Properties spent a median of 28 days on the market, slightly longer than the 27 days in June and the 24 days in July 2024.
- Cash Sales and Investors: Cash sales made up 31% of transactions, and individual investors or second-home buyers accounted for 20% of sales.
- Mortgage Rates: The average 30-year fixed-rate mortgage was 6.72% in July, a slight decrease from the 6.82% in June.
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Yun concluded that the market remains healthy, pointing to the fact that distressed sales (foreclosures and short sales) accounted for only 2% of transactions, a historic low. This stability, coupled with gradually improving affordability and rising inventory, suggests a cautious but encouraging path forward for the U.S. housing market.
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