“Despite the frictions related to obtaining mortgages, buyer interest remains solid,” said NAR Chief Economist Lawrence Yun. “But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix.”
The national median home price was $189,400 in June, up 7.9% from last June. That’s the fourth monthly price increase and the biggest leap in median price since February of 2006, when the median price rose 8.7%. The median price is the point at which half the homes sold for more and half sold for less.
With supply limited, the number of homes, townhomes, condominiums, and co-ops selling in June fell 5.4% from May’s sales volume, with 4.37 million homes changing hands in June. That’s 4.5% more than sold in June of 2011.
The number of distressed sales in June held steady. About 13% of homes sold in June were foreclosures and another 12% were short sales, where the bank allowed the owners to sell for less than what was owed on the mortgage.
Foreclosures sold for an average discount of 18% below market value in June, while short sales were discounted 15%. “The distressed portion of the market will further diminish because the number of seriously delinquent mortgages has been falling,” Yun predicted.
There are more shoppers and fewer sellers out there, said NAR President Moe Veissi. “Buyer traffic has virtually doubled from last fall, while seller traffic has risen only modestly,” he said. “The very favorable market conditions are helping to unleash a pent-up demand, which is why housing supplies have tightened and are supporting growth in home prices. Nonetheless, incorrectly priced homes will not attract buyers.”
The number of homes for sale nationwide fell 3.2% from May to June. There are now 24.4% fewer homes for sale than there were a year ago when there was a 9.1-month supply. At the current sales pace, there was a 6.6-month supply of homes for sale in June, up from a 6.4-month supply in May.
First-time buyers bought about a third of the homes purchased in June. “A healthy market share of first-time buyers would be about 40%, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry-level activity,” Yun said.
Investors are also buying — they purchased 19% of homes in June, up from 17% in May.
Median home prices
Single-family homes had the highest national median sales price, $190,100 in June, up 8% from a year ago.
The national median sales price for condos and co-ops was $183,200, up 6.9% from last June.
Regional home sales and prices were mixed:
- Northeast: Median price fell 1.8% to $253,700 and sales dropped 11.5%
- Midwest: Median price rose 8.4% to $157,600 and sales dropped 1.9%
- South: Median price up 6.6% to $165,000 and sales dropped 4.4%
- West: Median price up 13.3% to $233,300, sales down 6.9%.
Read more: http://www.houselogic.com/news/home-thoughts/homes-prices-pushed-limited-supply-starter-homes/#ixzz21BLp8U2Y
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