Limited inventory is pushing up prices of existing homes and thwarting first-time home buyers, according to a report released Thursday morning.
The National Association of Realtors reported that existing-home prices nationally rose in June to $189,400, up 7.9 percent from a year ago and marking four back-to-back month-over-month price increases from a year earlier. June’s gain was the strongest since February 2006 when the median price rose 8.7 percent from the previous year.
Meanwhile, existing-home sales fell 5.4 percent in June, mainly due to an insufficient supply of affordable homes. The 4.37 million previously occupied homes sold was the fewest since October. Still, it was 4.5 percent higher than a year ago.
“Despite the frictions related to obtaining mortgages, buyer interest remains solid,” Lawrence Yun, NAR chief economist, said in a statement. “But inventory continues to shrink and that is limiting buying opportunities. This, in turn, is pushing up home prices in many markets. The price improvement also results from fewer distressed homes in the sales mix.”
Distressed homes — foreclosures and short sales — accounted for 25 percent of June sales, down 30 percent from June 2011.
First-time home buyers made up only 32 percent of the purchasers in June.
“A healthy market share of first-time buyers would be about 40 percent, so these figures show that tight inventory in the lower price ranges, along with unnecessarily tight credit standards, are holding back entry level activity,” Yun said.
The Northeast saw the biggest decline in existing home sales, down 11.5 percent from May. The West had a 6.9 percent drop, the South a 4.4 percent drop and the Midwest a 1.9 percent drop compared to last month.
The Northeast was the only region to see a decline in sales price, down 1.8 percent from last year. The West had an increase of 13.3 percent, the Midwest an increase of 8.4 percent and the South an increase of 6.6 percent from a year ago.
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