Existing home sales tick up in July

Still, the market is being hampered by unnecessarily tight lending standards and shrinking inventory supplies. 

“Housing could easily be much stronger without these abnormal frictions,” Yun said.

Meanwhile, the 30-year fixed-rate mortgage fell to a record low 3.55 percent in July from 3.68 percent in June.

Sales are 10.4 percent above the 4.05 million pace in July 2011.

Improved lending standards and improved job creation could push existing-home sales up to a more normal 5 million next year, Yun said.

The NAR is asking the government to release the foreclosed properties it owns in inventory-constrained markets.

The national median existing-home price for all housing types was $187,300 in July, up 9.4 percent from a year ago, the strongest since January 2006 when the median price rose 10.2 percent from a year earlier.

The last time there were five back-to-back monthly price increases from a year earlier was in January to May 2006. 

“Fewer sales in the lower price ranges are contributing to stronger increases in the median price, but all of the home price measures now are showing positive movement and that is building confidence in the market,” Yun said.  

“The higher median price naturally means more housing contribution to economic growth.”

Total housing inventory at the end July increased 1.3 percent to 2.40 million existing homes available for sale, which represents a 6.4-month supply at the current sales pace, down from a 6.5-month supply in June and well below the 9.3-month supply a year ago. 

“The total supply of housing inventory appears to be balanced in historic terms, but there are notable shortages in the lower price ranges which are limiting opportunities for first-time buyers,” Yun said.  

“The low price ranges also are popular with investors, so entry-level buyers are at a disadvantage because many investors are making all-cash offers.”

First-time buyers accounted for 34 percent of purchases in July, up from 32 percent in June. Under normal conditions, entry-level buyers account for about 40 percent of all purchases.

All-cash sales slipped to 27 percent of transactions in July. 

Investors, who account for the bulk of cash sales, purchased 16 percent of homes in July, down from 19 percent in June.

Distressed homes — foreclosures and short sales sold at deep discounts — accounted for 24 percent of July sales down from 25 percent in June.

Foreclosures sold for an average discount of 17 percent below market value in July, while short sales were discounted 15 percent.

Single-family home sales increased 2.1 percent to a seasonally adjusted annual rate of 3.98 million in July from 3.90 million in June, and are 9.9 percent above the 3.62 million-unit level in July 2011. 

Monthly sales rose in every region but the West, where inventory remains very tight.

Regionally, existing-home sales in the Northeast rose 7.4 percent, 2 percent in the Midwest and 2.3 percent in the South.

Sales in the West were unchanged at an annual pace of 1.08 million in July but are 5.9 percent higher than a year ago.  

With pronounced inventory shortages, the median price in the West was $238,600, a jump of 24.5 percent from July 2011.