Existing Home Sales in June Were Up 23% From Last Year
Buyers in today's real estate market have been struggling with a lack of housing inventory. But things are opening up a touch in that regard.
In June, total housing inventory rose slightly to 1.25 million units and a 2.6-month supply, a modest uptick from May's 2.5-month supply, according to the National Association of Realtors. That, in turn, led to an increase in existing home sales, which were up 1.4% from May. But what's more impressive is that they rose 22.9% from a year prior. That's a clear indication that supply has picked up.
That said, housing inventory at the end of June was still down almost 19% from a year prior. So today's buyers may still face their share of challenges as they attempt to navigate the current real estate market.
Is now a good time to buy a home?
From an inventory and pricing perspective, now's actually a pretty bad time to purchase a home. While the fact that inventory rose in June is a good thing, a 2.6-month supply of homes still gives sellers a major upper hand over buyers. It takes a 4- to 5-month supply of homes to give buyers more bargaining power.
What's more, because supply is still down on a whole, home prices have increased. In June, the median price for an existing home came to $363,300. That represents a 23.4% increase from June of 2020, when the median home price sat at $294,400. Also, increasing prices were universal -- every region in the U.S. recorded price gains in June.
As such, buyers who attempt to purchase homes today will likely end up having to pay a lot more than usual -- and take on higher mortgages as a result. The good news is that mortgage rates are still sitting at competitive levels, and that can help offset higher home prices. But that may not be enough to propel today's homes into the affordable range for buyers on a budget.
The upside of waiting
A lot of people want to buy homes in the near term so they can capitalize on today's attractive mortgage rates. But those rates are likely to stay low for not only the remainder of the year, but also well into 2022. And given that housing inventory has slowly but surely been creeping upward, it could pay for buyers to sit tight and see how those incremental increases impact home prices.
We just saw the supply of available homes move from 2.5 months' worth in May to 2.6 months' worth in June. It could be the case that July's numbers come to 2.8 months' worth of homes, and that by August, we're at the 3-month supply mark.
If that happens, these modest upticks will make a difference over time, which is why it could make sense for some buyers to hit pause on their home search and resume it later in the year, or even in 2022. With any luck, an increase in supply will drive home prices down so buyers have more options -- and don't have to stretch themselves as much financially to own a piece of property.
A historic opportunity to potentially save thousands on your mortgage
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
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