Homes sales rose more than 20 percent in June after three months of declines

Sales of existing homes rose more than 20 percent in June after three straight months of declines amid the coronavirus pandemic, according to data released Wednesday by the National Association of Realtors (NAR).

Completed sales of single-family homes, townhomes, condominiums and co-ops rose 20.7 percent last month to a seasonally adjusted annual rate of 4.72 million, the NAR reported, as the loosening of coronavirus-related restrictions spurred a sharp rebound in the housing market.

“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, the NAR’s chief economist. “This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

The U.S. economy began to recover in May and June from the shock of the first wave of novel coronavirus infections and the business closures imposed to contain them. Unemployment has declined from a post-Great Depression peak of 14.7 percent in April to 11.1 percent in June, powered by the return of millions of furloughed workers. Retail sales and consumer spending also rose over the past two months.

Even so, the damaged state of the economy and the rising risks of another downturn driven by a second wave of infections has restrained an already meager supply of available homes, driving prices higher for the 100th consecutive month, according to the NAR. The median price for all existing homes in June was $295,300, according to the NAR, up 3.5 percent from June 2019.

“Inventory levels of both new and existing homes dropped sharply earlier this spring, as construction halted during the onset of the pandemic. Additionally, some homeowners were reluctant to put their home on the market because of health/safety reasons and overall economic uncertainty,” explained Mike Frantantoni, chief economist at the Mortgage Bankers Association, in an email.

“Demand has increased since May as states have reopened, with purchase activity up year-over-year for two straight months. This has only put more pressure on existing inventory levels, and ultimately will keep home prices growing through this year and into next.”

Rising housing prices were a dire issue facing low-income Americans before the coronavirus pandemic shattered the U.S. economy and pose a growing threat as the recovery from the first wave begins to teeter.

Tens of millions of Americans could face eviction or foreclosure on their homes when a federal moratorium expires at the end of July and the $600 boost weekly boost to unemployment benefits runs out without a replacement.