A shortage of homes didn’t stop Americans from buying existing properties as sales rose 3.2 percent in June, reaching the highest annual rate since June — 5.47 million units, according to the National Association of Realtors.
The rise in home sales was bolstered by first-time buyers taking advantage of historically low mortgage rates.
First-timers made up 34 percent share of sales, which is a high not seen in more than four years, Realtors said. All major regions saw an increase in closings last month, and distressed sales fell to a new low of 4 percent of the market.
The supply of available homes was 2.04 million, down 6.8 percent from a year ago. Tight inventories drove the median price of existing homes up 5.6 percent from a year ago to $234,200. The institutional investors who bought up homes in recent years have continued to rent them out, rather than putting them on the market. Meanwhile, homebuilders have not aggressively stepped up construction.
Lawrence Yun, NAR chief economist, says a two-month slump in existing sales suddenly reversed course sharply in September.
“The home search over the past several months for a lot of prospective buyers, and especially for first-time buyers, took longer than usual because of the competition for the minimal amount of homes for sale,” he said. “Most families and move-up buyers look to close before the new school year starts. Their diminishing presence from the market towards the end of summer created more opportunities for aspiring first-time homeowners to buy last month.”
Distressed sales — foreclosures and short sales — fell to a new low of 4 percent in September (since NAR began tracking in October 2008), down from 5 percent in August and 7 percent a year ago.