Background on the National Association of Realtors (NAR)
The National Association of Realtors (NAR) is a prominent trade organization in the United States, representing real estate professionals and advocating for their interests. As the voice of the real estate industry, NAR provides valuable data and insights into housing market trends. Their reports are widely respected by economists, policymakers, and the general public.
July Sales Surge, Yet Market Conditions Persist
The sales of previously owned homes in the United States unexpectedly increased by 2% in July, reaching an annualized rate of 4.01 million units, compared to 3.93 million in June, according to the National Association of Realtors (NAR) report released on Thursday.
Economists surveyed by Reuters had anticipated a nearly unchanged figure from June, estimating around 3.92 million units. The year-over-year sales increased by 0.8%.
Lawrence Yun’s Perspective
Lawrence Yun, NAR’s Chief Economist, believes that the data suggests a potential easing of factors hindering home sales: high mortgage costs and limited inventory.
Historically Low Sales Rates
Over the past two years, monthly sales have hovered around 4 million units, a rate lower than even the 2007-2009 recession caused by the housing market collapse.
Mortgage Rates and Future Outlook
According to Freddie Mac data, the average 30-year fixed mortgage rate has recently dropped to 6.58%, a new low since the fall of the previous year, though it remains significantly higher than pre-COVID-19 levels.
With the Federal Reserve expected to resume credit cost reductions next month, Yun anticipates further mortgage rate declines in the coming months.
Home Prices and Inventory
The average home sale price increased by 0.2% compared to the previous year, reaching $422,400, marking the twenty-fifth consecutive annual increase. However, it fell short of June’s record high.
Yun noted that the annual price growth rate was the lowest since June 2023.
Total inventory also rose to 1.55 million units. At the current sales pace, inventory would last for 4.6 months, up from June’s 4.7 months.
Key Questions and Answers
- What is the National Association of Realtors (NAR)? The NAR is a leading trade organization in the U.S., representing real estate professionals and providing valuable data on housing market trends.
- What was the unexpected rise in July home sales? Sales of previously owned homes increased by 2% in July, reaching an annualized rate of 4.01 million units.
- What factors are affecting home sales? High mortgage costs and limited inventory have been hindering home sales, according to Lawrence Yun, NAR’s Chief Economist.
- How do current sales rates compare to historical data? Monthly sales have been around 4 million units over the past two years, a lower rate than even during the 2007-2009 recession.
- What is the current status of mortgage rates? The average 30-year fixed mortgage rate has recently dropped to 6.58%, but it remains higher than pre-COVID-19 levels.
- What is the outlook for future mortgage rate changes? With the Federal Reserve expected to resume credit cost reductions, Yun anticipates further mortgage rate declines in the coming months.
- How have home prices changed recently? The average home sale price increased by 0.2% compared to the previous year, reaching $422,400.
- What is the current housing inventory situation? Total inventory rose to 1.55 million units, with the current sales pace suggesting a 4.6-month supply.
