Sales to first-time home buyers fell to their lowest level since January, and not for the usual reasons. Interest rates are low, and the labor market is growing – so what’s behind the trend? According to the National Association of Realtors®, it’s low inventory and the rising home prices that inevitably come with it.
Total existing home sales rose 2% in July, remaining at their highest pace since February 2007. Sales of existing homes have risen year-over-year for the past 10 consecutive months and are 10.3% higher than this time last year. However, total housing inventory dropped by 0.4% at the end of July, and stands 4.7% lower than a year ago. Unsold inventory is at a 4.8 month supply, down from 4.9 months in June.
The median price for existing homes (all types) has risen 5.6% in the past year, and stands at $234,000. July marks the 41st consecutive month of year-over-year gains in existing home prices.
NAR Chief Economist Lawrence Yun says the prospect of higher interest rates and home prices in the coming months are encouraging more households to buy now, and that many homeowners are using their rising equity to finance the down payment on a new purchase.
This Week’s Mortgage Rate Summary:
- Rates Currently Trending: LOWER
- Weekly Rate Forecast: LOWER
- This Week’s Potential Volatility: HIGH
Prospective buyers who’ve been playing the waiting game are urged to talk with their mortgage professional right away to learn more about the risks and rewards of locking a rate or floating down your current one in this highly active market. Need to talk to a Texas mortgage professional? Contact Kelly Decker’s team at (972) 591-3097 today for a free rate quote on your next Texas home loan.