Sales of existing homes edged forward in July, coming in at an annual rate of 4.47 million properties. That was modestly ahead of the prior-month level of 4.37 million homes. However, it was slightly below the forecast rate of 4.52 million homes sold last month.
Overall, this latest result, which was issued by the National Association of Realtors, a trade group, was yet one more metric showing that the long-troubled housing market was on the road back, but that this road would be a long and winding one. The median price of a home sold, meanwhile, was $187,300. That was 9.4% higher than the comparable figure of a year earlier.
“Mortgage interest rates have been at record lows this year,” said NAR chief economist Lawrence Yun, noting that the labor market was also now on the mend. That, too, should help this troubled market. He went on to say that “combined, these factors are helping to unleash pent-up demand.”
In all, housing, which has suffered through one of the steeper overall declines in the recession and its less-than-uplifting aftermath, has been one of the few relative bright spots in the recovery story this year, in a reversal of form from 2010 and 2011. Back then, housing had been one of the weak links in the fragile recovery chain.
As to the supply of homes, inventories edged up last month, rising to 2.40 million unsold homes up from 2.37 million residences in June. However, the 6.4 month supply of unsold homes is at a rate that's considered quite healthy. Also, sales of distressed properties came to 24% of the aggregate total in July, down from 25% the month before. That total includes short sales and foreclosures.
Finally, a separate report showed that applications for U.S. home mortgages tumbled last week, as demand for refinancing dried up, reflecting the recent jump in mortgage rates. Fixed 30-year mortgage levels rose by 10 basis points, to an average of 3.86%. That is still a historically low rate, but it is, nevertheless, well up from the earlier rate of just above 3.50%.
In all, this was a decent report, but clearly no game changer. This market's comeback remains intact--only it is a slow recovery and a distressingly uneven one. At the time of this article’s writing, the author did not have positions in any of the companies mentioned.