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Existing-home sales jump to an eight-month high

A row of homes in Pittsburgh, Pennsylvania. Pittsburgh is one of several cities working directly with NextDoor to improve public safety.A row of homes in Pittsburgh, Pennsylvania. Pittsburgh is one of several cities working directly with NextDoor to improve public safety.

Existing-home sales climbed 2.6% in June from the prior month, according to the National Association of Realtors, the strongest sales pace in eight months but slightly under last year’s level.

The trade organization on Tuesday reported total existing-home sales climbed to a seasonally adjusted annualized rate of 5.04 million June from the upwardly revised 4.91 million annual rate in May. Observers had predicted a 4.99 million annual rate for June, according to a poll by Bloomberg News.

Lawrence Yun, the association’s chief economist, said housing fundamentals were well positioned. He said inventories are at their highest level in over a year and price gains have slowed in many parts of the country.

“This bodes well for rising home sales in the upcoming months as consumers are provided with more choices,” Yun said.

The housing sector suffered a mixed performance earlier this year, which many attributed to the severe winter weather. That slowdown was worrisome heading into the key spring and summer home-buying seasons, though some metrics recently have suggested improvement. Builder confidence, for example, broadly improved in June and some of the nation’s largest homebuilders have reported sturdy results of late.

But there are some trends that suggest the sector’s recovery is stalling, including homeownership rates that are nearing their long-term average.

Total housing inventory at the end of the month increased 2.2% to 2.3 million existing homes available for sale, the association reported. That represents a 5.5-month supply at the current sales pace, a slight drop from 5.6 months in May.

The median existing-home price for all housing types totaled $223,300 in June, up 4.3% from a year ago. Higher home prices bode well for home-improvement retailers Home Depot (HD) and Lowe’s (LOW), as homeowners are inspired to spend more on renovations and repairs when they perceive a return on their investment.