MNI DATA REACT: US July Existing Home Sales Highest Since 2006

U.S. home sales jumped 25% in July, the strongest increase in records dating back to 1968, the National Association of Realtors said Friday.

The second straight surge in demand took sales of existing homes to a seasonally adjusted annual rate of 5.86 million, the highest since 2006, up from 4.7 million in June. From a year earlier, sales were up 8.7%.

Pent-up demand and record-low mortgage rates are driving sales higher, NAR Chief Economist Lawrence Yun said Friday on a call with reporters. Future sales will be a push-and-pull between a market with limited supply and any remaining buyers who were forced to delay purchases amid the Covid shutdown, he said.

The latest numbers signal a "shift where people not able to make the move in the spring are now moving in the summer," and likely into the fall, Yun said. New demand has also been created by the pandemic as more people are working from home and being offered the chance to move out of major cities, Yun said.

Prices Soar Too

Home prices grew in every major region, and the median national home price jumped 8.5% from June to USD304,100, topping USD300,000 for the first time ever. The Covid-19 pandemic has done little to slow monthly increases in home prices, with July's record-shattering figure representing more than 8 years of monthly year-over-year gains.

All four major sales regions saw double-digit monthly growth in July, with sales up 40% in the West and Midwest, up 33% in the Northeast, and 26% in the South. Year-over-year sales in both the West and Midwest were flat and down by 20% in the Northeast. In the South, sales were up 7.4% from a year earlier.