Sales of existing homes in the US climbed for the third consecutive month in June, fuelling optimism for a broader economic recovery.
According to the National Association of Realtors (NAR) in the United States, existing home sales increased 3.6% to a seasonally adjusted annual rate of 4.89 million units in June, just 0.2% lower than the 4.90 million-unit level in June 2008.
"We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions," says Lawrence Yun, NAR Chief Economist.
But the effect of the credit crisis and sustained economic uncertainty had a dampening effect on sales figures through the high level of forced sales recorded in the period. 31% of sales in June were for distressed properties dragging down the median house price. The national median existing-home price for all housing types was $181,800 in June, which is 15.4% below June 2008.
However the NAR was positive about inventories. Total housing inventory at the end of June fell 0.7% to 3.82 million existing homes available for sale, which represents a 9.4-month supply at the current sales pace, down from a 9.8-month supply in May. Raw inventory totals are 14.9% below a year ago.
"This is another hopeful sign - if we can keep the volume of sales above the level of new inventory, prices could stabilise in many areas around the end of the year," says Yun. However he signaled some structural drag from the implementation of the new Home Valuation Code of Conduct, with 37% of NAR members surveyed saying they had lost at least one sale because of these new guidelines.
NAR President, Charles McMillan, was also upbeat about the US housing outlook. "Despite some of the challenges, the housing market continues to demonstrate signs of recovery," he says. "The temporary first-time buyer tax credit is clearly helping people make a decision and is contributing to the overall stimulus impact, but since it's taking longer to close transactions, many would-be beneficiaries may not be able to take advantage of the credit before the December 1 expiration date."
By type, single-family home sales rose 2.4% to a seasonally adjusted annual rate of 4.32 million in June. The median existing single-family home price was $181,600 in June, 15.0% below June 2008. Existing condominium and co-op sales jumped 14% to 570,000. The median existing condo price was $183,300 in June, down 18.9% for the year.
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