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14 West Hawaii Real Estate | August 31, 2018
Existing-home sales slip 0.7 percent in July
Existing-home sales subsided
for the fourth straight month
in July to their slowest pace
in over two years, according
to the National Association of Realtors.
The West was the only major region
with an increase in sales last month.
Total existing-home sales, which
are completed transactions that
include single-family homes, townhomes,
condominiums and co-ops,
decreased 0.7 percent to a seasonally
adjusted annual rate of 5.34 million in
July from 5.38 million in June. With
last month’s decline, sales are now
1.5 percent below a year ago and
have fallen on an annual basis for five
straight months.
Lawrence Yun, NAR chief economist,
says the continuous solid gains
in home prices have now steadily
reduced demand. “Led by a notable
decrease in closings in the Northeast,
existing home sales trailed off again
last month, sliding to their slowest
pace since February 2016 at 5.21 million,”
he said. “Too many would-be
buyers are either being priced out, or
are deciding to postpone their search
until more homes in their price range
come onto the market.”
The median existing-home price
for all housing types in July was
$269,600, up 4.5 percent from July
2017 ($258,100). July’s price increase
marks the 77th straight month of yearover
year gains.
Total housing inventory at the
end of July decreased 0.5 percent to
1.92 million existing homes available
for sale, unchanged from a year ago.
Unsold inventory is at a 4.3-month
supply at the current sales pace, also
unchanged from a year ago).
Properties typically stayed on the
market for 27 days in July, up from 26
days in June but down from 30 days a
year ago. Fifty-five percent of homes
sold in July were on the market for
less than a month.
“Listings continue to go under contract
in under month, which highlights
the feedback from Realtors that buyers
are swiftly snatching up moderatelypriced
properties,” said Yun. “Existing
supply is still not at a healthy level,
and new home construction is not
keeping up to meet demand.”
According to Freddie Mac, the average
commitment rate for a 30-year,
conventional, fixed-rate mortgage
decreased to 4.53 percent in July from
4.57 percent in June. The average
commitment rate for all of 2017 was
3.99 percent.
“In addition to the steady climb
in home prices over the past year,
it’s evident that the quick run-up in
mortgage rates earlier this spring has
had somewhat of a cooling effect on
home sales,” said Yun. “This weakening
in affordability has put the most
pressure on would-be first-time buyers
in recent months, who continue to
represent only around a third of sales
despite a very healthy economy and
labor market.”
First-time buyers were 32 percent
of sales in July, which is up from 31
percent last month but down from
33 percent a year ago. NAR’s 2017
Profile of Home Buyers and Sellers –
released in late 2017 – revealed that
the annual share of first-time buyers
was 34 percent.
“Despite first-time buyers struggling
to achieve homeownership,
Realtors in most areas say demand
is still the strongest at the entry-level
segment of the market,” said NAR
President Elizabeth Mendenhall, a
sixth-generation Realtor from Columbia,
Missouri and CEO of RE/
MAX Boone Realty. “For prospective
first-timers looking to begin their
home search this fall, it is expected
that competition will remain swift.
That is why it’s important to be fully
prepared with a pre-approval from
a lender, and to begin conversations
with a Realtor early about what you’re
looking for and where.”
All-cash sales were 20 percent of
transactions in July, down from 22
percent in June but up from 19 percent
a year ago. Individual investors,
who account for many cash sales,
purchased 13 percent of homes in
July (unchanged from last month and
a year ago).
For prospective first-timers looking to begin their home search this fall, it is expected
that competition will remain swift. That is why it’s important to be fully prepared
with a pre-approval from a lender, and to begin conversations with a Realtor early
about what you’re looking for and where.” – Elizabeth Mendenhall, NAR President
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