Existing Home Sales Drop In June But Hint At Higher Price Tier Support
Consistent with most post-home buyer tax credit housing news, the National Association of Realtors® says Existing Home Sales eased lower last month.
An “existing home” is a home that cannot be considered new construction.
The 5 percent drop in sales from May to June was expected, but a closer look at the month’s data reveals some interesting trends.
First, repeat buyers accounted for 44 percent of home resales in June, up from 40 percent in May. That’s a healthy increase for just 4 weeks’ time and the tax credit is a likely catalyst. First-timer buyers bought starter homes owned by former first-timers, who were then free to “move up” to larger, more expensive property.
Housing markets can be trickle-up and, not coincidentally, the jumbo/luxury housing market is now in the midst of rebound.
Second, June’s “distressed sales” accounted for 32 percent of all home resales, up from 31 percent in May.
A figure like this hints at the large role foreclosures continue to play in a home buyer’s home search strategy. And why not? The National Association of Realtors® suggests that distressed homes are sold at a 15 percent discount.
Lastly, take note that home inventories are rising. June’s 8.9 months of supply is the highest in 10 months. Excess supply leads home prices lower, all things equal.
Overall, the Existing Home Sales data from June is a mixed bag. There’s support for the middle- and upper-price tiers, but a growing overhang of supply. The market looks favorable for buyers given low mortgage rates and strong negotiation leverage.
Related posts:
- Existing Home Sales Unexpectedly Drop In February
- New Home Sales Rise In November; Hint At Strong Winter 2011
- Existing Home Sales Jump; Housing Market Shows Spark
Michael Haigh has 20+ years of professional experience in the banking and mortgage industry. He has the knowledge, education, and dedication to get you the best loan for your situation, answer your questions honestly and completely, and make your mortgaging experience a pleasure. His reputation includes being the number one lender in the country for CitiBank for 9 years, then at Chase for 1 year and now with WJ Bradley since August of 2009. This is because of the quantity of loans, myriad of people he's helped, and his dedication to helping his clients find the perfect loan for them.
