With previously owned home sales rising for the third straight month, the chief economist at a major realty group says the trend will continue due to tax breaks and the high affordability.
The latest figures in June show a 3.6 increase, according to the National Association of Realtors, beating expectations of 1.5 percent growth from economists polled by Thomson Reuters.
Across the U.S. in June sales of single-family, townhomes, condominiums and co-ops were 4.89 million, according to today’s report.
“We expect a gradual uptrend in sales to continue due to tax credit incentives and historically high affordability conditions, said Lawrence Yun, the chief economist at NAR in a released statement. He also noted that the increase in sales occurred in all major regions of the country.
The total housing inventory at the end of June was falling as well, down 0.7 percent to 3.82 million. That represents a 9.4 month supply at the current sales pace, down from a 9.8 month supply in May.
“This is another hopeful sign – if we can keep the volume of sales above the level of new inventory, prices could stabilize in many areas around the end of the year.
The temporary first-time buyer tax credit, which expires December 1, is “clearly helping” people in making a decision to buy homes, said NAR President Charles McMillan, who is also a broker in the Dallas-Fort Worth area.
Home prices are also down compared to the same period last year, with the national median price for existing homes at $181,800 in June, down about 15.4 percent.
Existing single family home sales were up 2.4 percent from May. Existing condominium and co-op sales were up 14.0 percent.
By region, existing home sales in the Northeast were up 2.5 percent from May, but down 4.7 percent from a year ago. Midwest sales were up 0.9 percent from May but down 1.8 percent from last year. Sales in the South rose 4.0 percent from May, and were down 3.7 percent from a year ago. In the West, sales jumped 6.4 percent compared to may and were 11.5 percent higher than the same month in 2008.