June Existing Home Sales: Making Up For Lost Time

• June existing home sales rose 20.7% from May to 4.72 million (SAAR), according to the National Association of Realtors, the largest ever one-month increase in the series’ history. Sales were down 11.3% from June 2019.
• The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400).
• Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May and down 18.2% from one year ago.

After falling sharply in the early days of the pandemic, the housing market rebounded strongly through the spring – growth that is seen in recent sales figures. Existing home sales are measured when the deal closes, rather than when the contract is signed, making them more of a measure of homebuying activity from one or even two months before – in this case, when the nation was beginning to reopen from the economic shutdown brought upon by the first wave of COVID-19. Enticed by mortgage rates that started low and have only fallen further, and by the fact that real estate remained an essential industry in most markets nationwide, eager home shoppers  jumped at the opportunity to enter the market, making up for lost time and kick-starting a recovery that has carried into the summer. Low mortgage rates are poised to stay for a while, so buyer demand should stick around even as seasonal headwinds start to form. Although, there are some storm clouds gathering. Broader uncertainty  due to the surge in coronavirus cases and the prospect of disappearing fiscal support pose looming limitations as well. Historically low levels of for-sale inventory also has the potential to thwart the strong gains the housing market has recent enjoyed, and while for-sale inventory rose slightly in June, inventory remains significantly below last year’s levels. The coming months will be a true test of the housing market's enduring strength and resilience.

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