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The number of U.S. home sales grew 1.4 percent in June from the month before, and 22.9 percent year over year, the National Association of Realtors (NAR) reported.
The median price of existing homes sold set another new record at $363,000, gaining 23.4 percent over the median in June 2020.
Houses sold in June were on the market for 17 days, a record low, the NAR said.
Many houses are still selling above their list price and receiving multiple offers. (See “Frenzied Housing Market Becomes Even More Intense,” Trends Journal, 22 June 2021.)
Homes sold last month received an average of four offers, compared to five in May, largely because more owners listed their houses for sale to cash in on record high prices.
The larger number of listings gave buyers more houses to choose among, Lawrence Yun, the NAR’s chief economist, told the Wall Street Journal.
On 30 June, 1.25 million homes were on the market, about a 2.5-month supply, the NAR calculates.The figure is 3.3 percent more than in May, although still 18.8 percent fewer than in June 2020.
And today, it was reported that U.S. home prices were up 16.6 percent higher than in May 2020. This was the highest spike in the S&P CoreLogic Case-Shiller report in over 30-plus years.
TREND FORECAST: The housing boom will begin to slow for several reasons… and certain sectors stay strong for several reasons. On the downside:
- most affordable good-quality homes have already been sold;
- most households shopping for a home and able to meet today’s stringent lending standards already have bought;
- building costs remain high and builders are concerned that cost of materials will continue to increase, thus putting pressure on their development plans.
- 35 percent of people think that now is a bad time to buy a home, a record high number, according to a June survey by the Federal National Mortgage Association.
A slowing economy will soften home prices, but not greatly: the shortage of houses worth buying, compared to demand, will persist at least through 2022 due to a shortage of land and materials.
Also, more potential buyers now recognize that prices have reached absurd heights and will wait for prices to settle at lower levels before making a move.
And, prices will also come down should the United States ramp up fighting COVID War 2.0. Fighting the Delta variant will keep more people working from home which will also put more downward pressure on the commercial real estate sector.
This will in turn put more pressure on big city real estate.
On the upside, home prices in exurban areas will stay strong and rise as the fearful again head to the hills to escape the Delta variant infected crowds.