20 August 2014
For the first time in three years, the peak home buying season is bucking its usual slowdown, showing nationwide price and inventory increases, according to the realtor.com® July National Housing Trend Report.
“This is the first time, since the beginning of the recovery, that we expect to see positive momentum throughout the second half of the year,” said Jonathan Smoke, chief economist for realtor.com®.
For the past two years, the housing market saw external economic factors overshadow the gains made during the peak home buying season of April to July.
But not this year, Smoke said.
“This year, we’re ending the traditional season with high buyer and seller confidence demonstrated by price appreciation, increases in inventory and quick home sales,” he said.
Here are some highlights from the realtor.com® report:
July National Housing Indicators for 2012 – 2014
|Year||Total Listings||Year over year change||Month over month change|
|Year||Median List Price||Year over Year change||Month over month change|
|Year||Median Age of Inventory||Year over year change||Month over month change|
Homeowners are more optimistic about selling than in previous years, according to the data. In July, the number of homes on the market increased 2.3% compared with last year—and increased 4.5% from the month before.
One factor fueling this uptick in inventory is a 7.5% increase in median list prices year-over-year. Plus, despite higher prices and more homes on the market, buyers are snatching up properties faster than last year. Median age of inventory for July 2014 is 82 days, three days faster than in 2013.
While July growth may seem modest, it’s a stark contrast to housing indicators over the last two years.
In April 2013, mortgage interest rates began to increase significantly, making potential mortgage payments more expensive for home buying consumers. By July 2013, this slow but steady tightening of home buyer budgets dampened demand. As a result, month-over-month increases in inventory lessened and properties spent more time on market.
And in July 2012, concerns of broad debt defaults and economic weakness in Europe influenced big decreases in the stock market. Overall economic uncertainty contributed to weak consumer confidence, which influenced potential home buying consumers to remain on the sidelines while low prices made owners reluctant to list.
As a result, July 2012 median list prices remained flat both month-over-month and year-over-year. Inventory remained at very low levels and homes spent more days on the market.
“While seasonal patterns are emerging in July month-to-month comparisons, all other metrics point to fundamental market health and a build-up of momentum,” Smoke said.
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