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Median Price for Existing Home at Highest Level Since 2008; Sales Drop in June to 8-Month Low

The median price of an existing single family home rose in June to the highest level since almost four years, the fifth straight month-month gain, the National Association of Realtors (NAR) reported Thursday. The median price was up 7.9 percent from June 2011.

Existing home sales dropped to 4.37 million in June to the lowest level since last October, the NAR said. It was the fourth drop in the last five months. Economists had expected the sales pace to increase to 4.65 million from 4.62 million in May.

Despite the month-month decline, existing home sales continue a steady, longer-term increase. Sales have averaged 4.54 million in the first half of this year compared with 4.258 million in the same period last year and 4,307 million in the last half of 2011.

The NAR’s Pending Home Sales Index for April – which would have been reflected in the June home sales (closed sales) report — had fallen to 95.5 from 101.1 in March.

The median price of an existing home climbed 5.0 percent from May to its highest level since October 2008 when it was $189,400. The median price is up 7.9 percent in the last year, the strongest year-year increase since February 2006 when it showed an 8.3 percent year-year increase. The median price has shown a year-year gain for four straight months for the first time since mid-2006.

The inventory of homes for sale in June fell to 2.39 million, bringing the months’ supply of homes on the market to 6.6 from 6.4 in May.
Even with the month-month drop in sales, the NAR said June sales were up 4.5 percent in the last year, the 12th straight month of year-year sales increases. However, sales in April and May were ahead of prior year sales by double digit percentages, up 10.0 percent in April over April 2011 and up 11.2 percent in May over May 2011.

Distressed homes – foreclosures and short sales sold at deep discounts – accounted for 25 percent of June sales — 13 percent were foreclosures and 12 percent were short sales —, unchanged from May, the NAR said, but down from 30 percent in June 2011. Foreclosures sold for an average discount of 18 percent below market value in June, while short sales were discounted 15 percent.

Total housing inventory at the end of June fell 3.2 percent from May, the third decline in the last four months and is 24.4 percent below a year ago when the inventory was 3.16 million, a 9.1-month supply.

Regionally, existing-home sales fell in June in all four Census regions, down 11.5 percent month-month in the Northeast, 6.9 percent in the West, 4.4 percent in the South and 1.9 percent in the Midwest.
Sales were up year-year in three of the four regions, falling only in the West where they were down 3.6 percent. Sales improved year-year in the Midwest by 14.6 percent, in the South by 5.5 percent and in the Northeast by 1.9 percent.

The median price of an existing home rose month-month in every region and in year-year in three regions, falling 1.8 percent in the Northeast but increasing 13.3 percent in the West, 8.4 percent in the Midwest and 6.6 percent in the South.