In July 2023, home sales in the U.S. showed an unexpected increase, defying analyst forecasts. This article examines the factors contributing to this growth and the current state of the real estate market.
Home Sales and Mortgage Rates
Home sales rose by 2% in July compared to June, totaling 4.01 million units according to data released by the National Association of Realtors. This increase coincided with a temporary dip in mortgage rates, which ended at 6.67% in late June.
Inventory Rise and Home Prices
The number of homes available for sale surged to 1.55 million by the end of July, marking a 15.7% increase compared to last year. However, the median sale price of homes reached $422,400, an increase of 0.2% from the same month last year, indicating that affordable housing remains out of reach for many buyers.
Investors Return While First-Time Buyers Dwindle
In July, the average time to sell a home increased to 28 days, with first-time buyers making up only 28% of sales. Meanwhile, investors accounted for 20% of the market, suggesting a growing interest from cash-rich buyers.
While home sales are rising, many Americans still face financial challenges in purchasing homes, indicating a long-term affordability issue.
