Home prices across the U.S. rose for the fifth straight month in July, to a median price of $187,300. That was a 9.4 percent increase compared to one year ago, according to a new report from the National Association of Realtors.
Sales of homes have also been continuing a strong trend, with a 10.4% increase in total sales since July of 2011. While total sales increases have been strong, most expected them to be even bigger until the inventories in most major cities dropped so drastically this year. Homes available for sale have shrunk by 24 percent in one year across the country, and up to 50 percent in some large metropolitan areas. The scarcity of homes for sale and the increased buyer pool continues to push prices upward, as greater home sales in a shrinking market make for a highly competitive atmosphere.
From Inman News and the NAR:
Although the number of existing homes on the market was up 1.3 percent from June to July, to 2.4 million, that represents a 6.4-month supply of homes at July's faster pace of sales, down from 6.5 months of supply in June. And looking back a year, listing inventories were down 23.8 percent, when there was a 9.3-month supply of existing homes for sale.
Analysts generally consider a six-month supply of existing homes to be a healthy balance of supply and demand. More than that indicates that sellers significantly outnumber buyers, which puts downward pressure on prices.
"The total supply of housing inventory appears to be balanced in historic terms but there are notable shortages in the lower price ranges which are limiting opportunities for first-time buyers," Yun said. "The low price ranges also are popular with investors, so entry-level buyers are at a disadvantage because many investors are making all-cash offers."
Data Source: NWMLS - The Northwest Multiple Listing Service did not compile or publish this information.