Sales of existing homes in the country broke new records, spurred by ultra-low mortgage rates and after a three-month slump earlier this year during coronavirus pandemic lock downs.
Home buyers snapped up a dwindling supply of houses in July, leading to a 24.7 percent increase in the number of homes sold over the previous month.
The July 2020 surge in purchases reported Friday by the National Association of Realtors marked the second straight month of accelerating sales. June had reached its own high mark, with a more than 20 percent increase in sales over May.
Existing homes are defined as single-family homes, townhomes, condominiums and co-ops.
With July’s increase, to a seasonally adjusted annual rate of 5.86 million, purchases are now up 8.7% from a year ago. In July 2019, there were 5.39 million sales.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
Total housing inventory at the end of July totaled 1.5 million units, a year ago there were 1.9 million available units.
“More homes need to be built,” Yun said in a statement on NAR’s website.
Properties are staying on the market for an average of 22 days. This is down from 24 days in June, and 29 days in July 2019.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in July, up from both 9% in June 2020 and from 11% in July 2019.
The percentage of first-time home buyers was slightly down in July.