Existing home sales increased 2.4% in July, tallying the fourth consecutive month of increase. While the pace of existing home sales remains 4.3% below the July 2013 rate, the steady improvement for resales is positive news for the new home market because prospective repeat home buyers must sell their existing home before buying a newly built residence.
The National Association of Realtors (NAR) reported July total existing home sales at a seasonally adjusted rate of 5.15 million units combined for single-family homes, townhomes, condominiums and co-ops, up from a downwardly revised 5.03 million units in June.
Although the first-time buyer share increased for the third consecutive month to 29% in July, the share continues to lag far behind the historical average first-time buyer share of about 40%. Housing market improvements caused the distressed sales share to fall below 10% for the first time since NAR began tracking the series in October 2008.
The outlook for existing sales is positive due to a number of improving factors. The NAR pending home sales increased 3.3% in July, climbing four of the last five months. Consumer confidence increased in August for the fourth consecutive month. Second quarter GDP growth was revised up to a strong 4.2%expansion rate. And while the growth rate is slowing, home prices (according to the Case Shiller index) rose 6% on a year-over-year basis for the August report.
In contrast to existing sales, Read More Eye on the Housing