The US homes market is rapidly recovering as homeowners in negative equity resurface.
Latest price date from realtors for existing homes – that’s all homes excluding new builds – shows that prices are rising but sales are slipping.
The National Association of Realtors (NAR) collates house price figures from every state for a monthly index.
For June 2013, completions dropped 1.2% to a seasonally adjusted annual rate of 5.08 million from a 5.14 million in May. The figure is 15.2% higher than the 4.41 million home completions a year ago.
Lawrence Yun, NAR chief economist, said: “House prices are affordable in most parts of the country and the market still has a big pent up demand hanging over from the years of decline.
Average home worth $214,000
“Countering this, interest rates are higher in California, Hawaii and New York city.”
Realtors report that the number of homes for sale was up 1.9% in June to 2.2 million. The figure is equivalent to a 5.2 month supply of homes for sale at the current rate of sales.
This is down more than 7% on 12 months ago, when the homes for sale inventory stood at 6.4 months.
The average price of an existing home in the US in June was $214,200.
That’s 13.5% up on the same period in 2012 and is the 16th month in a row of price increases. This price performance was last seen between February 2005 and May 2006.
Negative equity
NAR president Gary Thomas said: “The increasing price of homes is moving many of them out of negative equity. More than 16% of agents report that clients they worked with in June were not in a position to sell because their mortgage was underwater.”
More than half of homeowners coming out of negative equity (53%) want to sell and buy another home.
Of the rest, 22% want to sell for financial reasons and then rent a home.
Many realtors (47%) also indicated in the survey that they have a bank of clients waiting for prices to rise even higher to move them out of negative equity so they can sell.
Homes are selling almost twice as quickly this year as in June 2012 – spending 37 days on the market before receiving a firm offer rather than 70 days a year ago. Almost half the homes sold in June were advertised for sale for less than a month.
