U.S. home sales returned to near seasonal levels, despite lack of supply.
With “home” being the unofficial word of the year, could home-buying activity rebound in Q3 and Q4? The data from the RE/MAX National Housing Report for June 2020 suggests it might. Despite a report-record low in Months Supply of Inventory, June home sales posted a massive month-to-month gain of 37% – a far cry from the results in May and April, when many states had stay-at-home mandates in place.
“June home sales snapped back in a major way,” said Adam Contos, RE/MAX Holdings CEO. “With historically low interest rates, stabilizing unemployment and increased mobility tied to working remotely, buyer demand remains high in most areas of the country. We’re seeing positives in several leading indicators such as pending sales and mortgage applications.”
In line with data from the latest RE/MAX National Housing Report, a recent survey published by the National Association of REALTORS® Research Group found 45% of members surveyed said their markets are slowly entering recovery, and 28% reported conditions hotter than normal.
A potential headwind, however, is available housing supply. Inventory dropped 27.9% year over year, pushing the Months Supply of Inventory to 1.9 from the previous report low of 2.7 months set in May. The number of homes for sale is at lows not seen consistently since early 2018.
“The biggest challenge continues to be lack of inventory, and over time we may see some gains around people wanting a different living environment after spending so much time at home this year,” Contos added. “There’s also some potential in the idea that with changing workplace dynamics, underused commercial spaces could be transformed into residential properties. Creative solutions like that may provide some relief for inventory constraints as well as affordability issues.”
Home prices remained steady in June, according to the RE/MAX report. June’s Median Sales Price of $275,000 is up 1.9% year over year, the lowest year-over-year price change of any month since December 2018’s 0.4% drop.
Some highlights of the latest data found in the RE/MAX National Housing Report:
1. Home Sales Post Near-Record Turnaround
Overall, U.S. home sales returned to near seasonal levels – just 6.9% lower than last June, which was the third-highest sales month of 2019. All of the report’s 53 metro markets posted gains over May, and a third of them topped last June. Leading the year-over-year sales percentage increase were Tulsa, OK at +15.9%, Little Rock, AR at +14.6%, and Dallas/Ft. Worth, TX at +9.3%.
2. Sales Prices Held Steady
In June 2020, the median of all 53 metro Median Sales Prices was $275,000, up 0.8% from May 2020 and up 1.9% from June 2019. While there was an increase in price, June saw the lowest year-over-year price change of any month since December 2018’s 0.4% drop. Only one metro area, Des Moines, IA at -1.3%, saw a year-over-year decrease in Median Sales Price. Two metro areas increased year-over-year by double-digit percentages: Miami, FL at +11.1% and Indianapolis, IN at +10.0%.
3. Buyer’s Markets Came Up Empty
A six months supply indicates a market balanced equally between buyers and sellers. In June 2020, of the 53 metro areas surveyed, zero metro areas reported a months supply at or over six, which is typically considered a buyer’s market. The number of homes for sale in June 2020 was down 5.3% from May 2020 and down 27.9% from June 2019. Based on the rate of home sales in June 2020, the Months Supply of Inventory decreased to 1.9 compared to 2.7 in May 2020 and 3.2 in June 2019.
If you’re thinking it’s time to search for a new place to call home, you aren’t the only one. A RE/MAX agent can provide help, information, guidance and expertise on all things related to real estate if you’re looking to buy or sell this summer.