Photo: James Bombales

The US housing market continued on a tear last month as a pandemic-triggered slowdown in home sales during the spring pushed home-buying season into summer.

Total existing-home sales, including single-family homes, townhomes, condominiums and co-ops, rose by 24.7 percent from June to July at a seasonally-adjusted annual rate of 5.86 million units, according to the National Association of Realtors.

It was the sharpest monthly sales gain recorded since NAR began collecting housing data in 1968 and beat out June’s 20.7 percent increase. Compared to the same period last year, existing-home sales were up 8.7 percent from seasonally-adjusted rate of 5.39 million units.

“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

A dwindling supply of homes for sale caused median prices to inch higher in July, hitting $304,100 — an 8.5 percent increase over July 2019. This marked the first time ever that the US median home price exceeded $300,000. Prices rose in every region of the country, but the West saw the most dramatic spike at a rate of 11.3 percent year-over-year to $453,800.

Low inventory remains a major issue that has been exasperated by the pandemic. In July, total housing inventory fell 2.6 percent from June and 21.1 percent over the previous year to 1.50 million units. The housing supply waned to 3.1 months, down from 3.9 months in June and 4.2 months in July 2019.

“The number of new listings is increasing, but they are quickly taken out of the market from heavy buyer competition,” said Yun. “More homes need to be built.”

Builders are responding to the demand for additional housing, posting a 22.6 percent increase in housing starts last month, according to a recent report from the Census Bureau. Single-family home construction led the way, reaching 940,000 units in July.

Further bolstering confidence in the single-family homes market is NAR’s breakdown of transactions by housing type. Sales of existing single-family homes jumped 23.9 percent month-over-month at a seasonally-adjusted annual rate of 5.28 million units in July, up 9.8 percent from the year before.

Condo and co-op sales showed an impressive 31.8 percent boost in sales from June to July at a seasonally adjusted annual rate of 580,000 units. Sales have remained steady compared to the same month last year, but median prices have gone up by 6.4 percent.

“Single-family homes are continuing to outperform condominium units, suggesting a preference shift for a larger home, including an extra room for a home office,” concluded Yun.

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