Sales of previously owned homes in the U.S. shot up 24.7 percent in July from June’s pace, the biggest monthly gain since 1968 when records began to be kept. It also was the fastest pace since December 2006, before the Great Recession struck.
There were 1.5 million homes for sale at the end of July, 21 percent fewer than a year earlier.
With mortgage rates at or near record lows and a shortage of homes for sale, the median price of an existing home climbed to a record $304,100.
Demand is so strong that 68 percent of houses sold in July were on the market for less than a month and a significant number drew competing bids.
New housing starts were up 22.6 percent and first-time home buyers accounted for 34 percent of July’s sales. Sales of new homes jumped 14 percent from May to June.
Homebuilders’ positive outlook, measured by the National Association of Homebuilders’ monthly survey, rose in August to its highest score ever.
TREND FORECAST: As we had forecast, there would be a great exodus from densely populated inner cities to urban and ex-urban areas. The COVID Panic was a factor for many people buying a home now rather than later, since many of the homes sold were far from urban centers.
However, despite the spike, according to Shadow Stats, the “July 2020 New-Home Sales (Census) monthly gain of 13.9% (on top an upwardly revised 38.8% gain off its April trough) was not statistically meaningful” since the gain was still down 35.1 percent from pre-Great Recession peak activity.
Beyond the housing spike, as we had forecast, commercial and rental markets in cities will continue to decline into “Greatest Depression” levels.
