Existing-Home Sales Up in July, Prices Rising Aug 23, 2012

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Sales of existing homes were up in July 2012, according to the National Association of Realtors. NAR said the increase came despite affordable inventory constraints. The national median price showed its fifth consecutive months of year-over-year increases.

Total existing-home sales grew 2.3% in July 2012 to a seasonally adjusted annual rate of 4.47 million, up from 4.37 million in June and up 10.4% from a 4.05 million-unit pace in July 2011.

Total existing-home sales include completed transactions of single-family homes, townhomes, condominiums, and co-ops.

Lawrence Yun, NAR chief economist, said housing affordability conditions are very good. "Mortgage interest rates have been at record lows this year while rents have been rising at faster rates. Combined, these factors are helping to unleash a pent-up demand," he said. "However, the market is constrained by unnecessarily tight lending standards and shrinking inventory supplies, so housing could easily be much stronger without these abnormal frictions."

NAR wants the government to quickly release the foreclosed properties it owns in inventory-constrained markets.

Given population and demographic demand, Yun said existing-home sales could be in a normal range of 5 to 5.5 million if all conditions were optimal. "Sales may reach 5 million next year, but it will require more sensible lending standards and stronger job creation to push beyond that," he said.

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