Home sales increased 1.4% from May to June, changing its course after four consecutive months of declines. According to data from the National Association of Realtors (NAR), home sales reached a seasonally adjusted annualized rate of 5.86 million units, a 22.9% increase compared to June 2020. Home sales in June reflect contracts signed in April and May. Inventory of homes also increased slightly, reaching a 2.6-month supply in June from May’s 2.5-month supply. NAR’s chief economist told CNBC that the data represents some softening in demand.
Low inventory continues to put pressure on prices. The median price of an existing home sold in June hit an all-time high of $363,300. That was 23.4% higher than the price in June 2020. Much of that gain, however, is skewed due to the types of homes that are selling. Sales of homes priced between $100,000 and $250,000 fell 16% annually. Sales of homes priced between $750,000 and $1 million jumped 119%.
“At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year,” Yun said. “Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
Price gains could start to cool. New listings spiked 9% last week, compared with the same week one year ago, according to Realtor.com. Inventory saw its 15th straight week of tapering declines.