There’s encouraging news on the U.S. housing market on at least two fronts, according to the National Association of Realtors.
First, the national median price of existing homes rose in July with five back-to-back months of year-over-year increases. The number of existing single-family homes, townhouses, condos, and co-ops grew 2.3 percent from 4.37 million in June to 4.47 million in July. When comparing this July to last July, the increase is 10.4 percent.
“Mortgage interest rates have been at record lows this year while rents have been rising at faster rates, said Lawrence Yun, NAR chief economist. “Combined, these factors are helping to unleash a pent-up demand,” he said. “However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions.”
Equally encouraging is the fact that houses are selling more quickly. In July 2011, the median time for a U.S. house to sit on the market was 98 days. For July this year, it’s about a month less at 69 days.
“Our current forecast is for the median existing home price to rise 4.5 to 5 percent this year and about 5 percent in 2013, which is somewhat stronger than historic norms because of the inventory shortfall that is most pronounced in the low price ranges,” Yun said.
Reports are also strong from the hardest-hit states like California, Nevada, Arizona and Florida, where home values took severe nosedives over the past five years.
For example, the California Association of Realtors reports the statewide median price of a single-family home in July 2012 shot up 12.7 percent over July 2011.
“The strong performance in the median price over the past few months reflects a sales shift away from homes in the lower price ranges of the market due to stark inventory toward sales of homes priced above $500,000,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “As an example, in July, sales of homes priced below $200,000 declined 9.4 percent from the previous year, and homes priced above $500,000 climbed 27.7 percent from a year ago.”
The Home Depot corroborates the upswing. Sales at the country’s largest home-improvement retailer jumped 12 percent in the second quarter of 2012 (April, May and June). Sales of paint, bathroom accessories and kitchen installations contributed to the boost.
Michele Dawson is a freelance writer based in Phoenix, Arizona. She spent seven years as a newspaper reporter and has written for various magazines and web sites specializing in real estate and home improvement, including Realty Times, SmartHomeowner, California Builder, and the Sacramento Business Journal.