Published by Breitbart | August 23, 2021
It is a tale of two housing markets.
Sales of previously owned homes worth more than one million dollars were up nearly 60 percent annually in July, while sales of homes worth a quarter of that or less were down by around 30 percent, according to recent data from the National Association of Realtors.
Overall sales of existing homes unexpectedly climbed in July, defying expectations for a slight downturn after gains in June. Homebuilder sentiment fell to a 13-month low in July and new home sales were weaker than expected, which set the stage for what was expected to be a softening in the market for previously owned homes.
There was weakness in the housing market in July—but only in the lower-priced end. Sales of home priced under $100,000 were down 31 percent compared with a year ago. Home priced between $100,000 and $250,000 declined by 38 percent. Together, those two categories made up around 28.4 percent of houses sold in the month.
Houses priced between $250,000 and $500,000 fell 1.1 percent. This price category accounts for 42.9 percent of the housing market.
Houses priced between $500,000 and $750,000 saw sales climb $32.2 percent. Sales of houses priced from $750,000 to one million dollars rose 52.1 percent. Sales of houses over $1 million were up 59.1 percent. The rising price categories made up around 28.7 percent of sales in July.
The strong gains in the upper end of the market pushed overall sales up 1.5 percent compared with a year ago. Compared with a month earlier, sales rose two percent, the second consecutive monthly gain.
“We see inventory beginning to tick up, which will lessen the intensity of multiple offers,” said Lawrence Yun, NAR’s chief economist.
“Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren’t seeing as much growth because there are still too few starter homes available.”
— Lawrence Yun, NAR’s chief economist
Total housing inventory at the end of July totaled 1.32 million units, up 7.3 percent from June’s supply and down 12 percent from one year ago.
The median existing-home price for all housing types in July was $359,900, up 17.8 percent from July 2020’s $305,600, as each region saw prices climb.
“Although we shouldn’t expect to see home prices drop in the coming months, there is a chance that they will level off as inventory continues to gradually improve,” said Yun. “In the meantime, some prospective buyers who are priced out are raising the demand for rental homes and thereby pushing up the rental rates.”
Properties are being swept up astonishingly quickly. A home was typically on the market for just 17 days in July, unchanged from June and down from 22 days in July 2020. Eighty-nine percent of homes sold in July 2021 were on the market for less than a month.
Many first time home buyers are being priced out of the market. First-time buyers made up just 30 percent of the market in July, which compares with 34 percent a year ago.
