Despite Ongoing Pandemic, US Sales of Existing Homes Jumped 20 Percent

Home purchase sales strongly rose in June by 20.7 percent, even after the pandemic caused home sales to slightly decrease in the past three months. However, Coronavirus cases continue to surge, which could prevent the housing market from rebounding further. Real estate prices continue to rise due to a shrinking supply of homes for sale and high demand. 

The National Association of Realtors reported sales of existing homes rose this month to a seasonally adjusted annual rate of 4.72 million. Despite the sharp gain, purchases are still down 11.3 percent from a year ago, when homes had sold at an annual pace of 5.32 million per month. 

However, housing has managed to avoid a deeper slump from the serious recession brought on by Coronavirus. Demand has remained steady and strong among buyers who have been thriving within the downturn of the economy. Furthermore, record-low mortgage rates have helped support affordability and encourage buyers to make a move. Buyers have remained stable, however new listings have declined. Although buyers are in abundance, more sellers need to step up before the real estate market will see an overall year over year increase in home sales. 

The number of property listings has significantly dropped from a year ago to 1.57 million, representing a 18.2 percent drop. June marks the 13th straight month of shrinking supply on an annual basis. It is unlikely the housing industry can advance the overall economy until more sellers enter the market, to balance a high demand of enthusiastic buyers. 

Home buyers would considerably boost the economy, as home buyers usually spend money on new furniture and fix older properties with numerous home repairs. However, their ability to supply a spending boost to the economy is restricted if they cannot find an available house on the market. The limited supply is also increasing prices, despite much of the population struggling with economic uncertainty due to the recession. 

Overall, the combination of stable and constant demand, paired with dramatically lowered mortgage rates has helped birth a 3.5 percent rise in the median price of an existing home over the past year to $295,300.

Home sales rose in the Northeast, Midwest, South, and West last month, however the increases were most concentrated in the West, with a 32 percent gain, along with the South, with a 26 percent gain.