US Existing Home Sales: Homebuyers make up for lost time in July – Wells Fargo

In July, sales of existing homes, jumped 24.7% to 5.86 million (annual rate). The housing data finally caught up with all the positive headlines the sector has received recently, explained analyst at Wells Fargo. 

Key Quotes: 

“July’s surge in existing home sales reflects some catch-up for sales lost during the spring selling season, when the economy was largely shut down, as well as a shift in preferences away from long-term renting toward homeownership. Sales are not likely to rise another 25% next month but will remain strong as long as employment conditions for middle- and upperincome households continue to improve.”

“The only downside to the resurgence in home sales is inventories have dwindled even further. Housing inventory at the end of July totaled just 1.50 million homes, down 2.6% from June and down 21.1% from a year ago.The inventory of unsold homes translates into just a 3.1-month supply at  July’s sales pace.  Sales are not likely to remain that high, however, as part of July’s surge includes the catchup of sales lost during the lockdown this past spring.”

“With demand strengthening and inventories tight, home prices are being pulled higher. The median price of an existing home has risen 8.5% over the past year to $304,100. July marks the first time median home prices topped $300,000.”