The housing market showed signs of improvement in July 2024, with closed sales of previously owned homes increasing by 1.3% compared to the previous month. This was the first gain in five months, indicating a potential turnaround in the market. However, despite this uptick, sales were 2.5% lower than the same period last year, highlighting continued challenges.
The Northeast experienced the biggest gains in home sales, while the Midwest saw flat sales. Prices also rose the most in the Northeast region, suggesting variations in market conditions across different parts of the country. These regional disparities could impact overall market trends and the pace of recovery.
Lower interest rates have contributed to increased affordability for consumers, making homeownership a more viable option for many. Mortgage rates dropped from over 7% in May and June to around 6.5% in July, stimulating demand for housing. However, affordability remains a key concern for first-time buyers, who face challenges amidst rising home prices.
The supply of homes for sale continued to grow in July, with a 0.8% increase from June and a significant 19.8% rise from July 2023. Despite the uptick in supply, home prices continued to increase, with the median price reaching $442,600, up 4.2% year-over-year. The market still faces a mismatch between supply and demand, impacting pricing trends.
First-time buyers represented 29% of sales in July, a slight decrease from the previous year. Historically, these buyers make up a larger share of the market, but affordability challenges have restricted their purchasing power. While lower interest rates may encourage more first-time buyers to enter the market, sustained affordability concerns could limit their participation.
The housing market in July 2024 showed signs of improvement, with increased sales and growing inventory. However, challenges such as affordability, regional disparities, and supply-demand dynamics continue to impact market trends. As the market evolves and interest rates fluctuate, it will be crucial to monitor these factors to understand the trajectory of the housing sector.