A pending signature has been posted in front of a house for sale in San Anselmo, California.
Justin Sullivan | Getty Images
According to the National Association of Realtors, home sales continued in June, rising 16.6% monthly since May and 6.3% after June 2019. This raises the expectation of monthly profit, which was an increase of 12.5%. This is the second straight month of gains in contract activity.
Realtors have also raised their forecast for the housing market because what they say is a clear market change. For 2020, current-home sales are expected to decline by only 3%. New home sales are projected to increase by 3%.
The previous forecast for current home sales was down 7.7% in 2020, with new home sales increasing 1%.
NAR chief economist Lawrence Yun said, “It is quite surprising and remarkable that in the midst of a global epidemic, contract activity for home purchases is higher than it was a year ago.” “Consumers are taking advantage of record-low mortgage rates as a result of the Federal Reserve’s maximum liquidity monetary policy.”
Contracts signed for sale measures in existing homes, therefore indicating that buyers were shopping in the month of June, just before the most recent surge in coronovirus cases. Sales were up 44% in May compared to April.
The average rate on a 30-year fixed mortgage at the beginning of June was around 3.24%, and by the end of June it was submerged to around 2.95% according to Mortgage News Daily. Since then, rates around 2.9% have been hovering near record lows. The National Association of Realtors estimates the rates to be at or near 3% over the next 18 months.
This is last week’s NAR report, which showed a 20.7% jump in sales of existing homes in June. After tracking the data in 1968 Realtors It is the largest monthly gain. The count is based on closings, and sales were still down 11.3% year-over-year.
One of the biggest issues remains the supply of existing homes for sale, which fell 18% year-on-year in June to just 1.57 million homes according to the NAR. Based on the current sales pace, which represents a four-month supply. Last June, 350,000 more homes were on the market. The supply was only 1% monthly from May to June. Yun says that the price of wood is hurting the builders.
Yun said, “Outlook is promising, related to rapidly rising lumber prices.” “The reduction in tariffs – even if temporary – will help increase home construction and will lead to faster economic growth.”
Regularly, pending home sales rose in all four regions of the United States. Sales in the Northeast rose 54.4% monthly and were down only 0.9% from a year earlier. In the Midwest, pending sales increased 12.2% monthly and 5.1% per year. Monthly growth was 11.9% in the South and 10.3% annually. In the West, pending sales jumped 11.7% monthly and rose 4.7% year-over-year.
“The Northeast’s strong surge comes after a long lockdown, while the South has consistently outperformed the rest of the country,” Yun said. “These notable discounts speak for exceptionally high buyer demand.”