Photo: Kārlis Dambrāns/Flickr
US home sales in July were at their highest in more than eight years, but a lower proportion of first-time buyers are taking part in the action.
While existing home sales rose 2 percent to a seasonally adjusted annual rate of 5.59 million last month — an increase from June’s rate of 5.48 million — the share of first-time buyers was down 2 per cent from June to 28 per cent, according to the National Association of Realtors (NAR).
The seasonally adjusted annual rate indicates what annual sales would amount to if that month’s pace continued for a 12-month period.
“The fact that first-time buyers represented a lower share of the market compared to a year ago even though sales are considerably higher is indicative of the challenges many young adults continue to face,” said Lawrence Yun, a NAR economist, in a news release.
With first-time buyers representing their smallest share in market activity since January, Yun cited rising rents and stagnating incomes as contributing factors, explaining they present challenges when it comes to saving for a downpayment. The low inventory levels that have been pushing up home prices have further exacerbated first-time home buyers’ difficulties.
One year ago, 29 per cent of all homebuyers were doing so for their first time.
Although Yun noted that “declining affordability could begin to slowly dampen demand,” for now, US existing home sales have consistently beaten out year-ago levels. In fact, July marked the 10th consecutive month this has happened. In July, sales stayed at their highest pace since February 2007, when the adjusted rate was 5.79 million. In all, total existing home sales in July amounted to a 10.3 per cent increase over a year ago.
The median existing home price was also up in July hitting $234,000, a 5.6 percent year-over-year increase.
Housing inventory, on the other hand, declined 0.4 percent to 2.24 million existing homes for sale in July, down 4.7 percent from a year ago.