A thriving housing sector can be the backbone of the U.S. economy, and the quality numbers have recently helped stimulate the market. However, despite reports of rising home values and builder earnings, existing-home sales decreased for June, according to recent property data from the National Association of Realtors.
The total number of sales are still up from the same time in 2012 regardless of the current decrease, per the NAR report. A complete count of single-family, townhomes, condos and co-ops, statistics state a decrease of more than 1 percent, to a seasonally adjusted annual rate of 5.08 million for June.
May posted better numbers, according to NAR, but the signs are still positive in recent memory. Multiple housing elements are doing well, and buyers have few reservations about taking the plunge and financing for home ownership.
"Affordability conditions remain favorable in most of the country, and we're still dealing with a large pent-up demand," said Lawrence Yun, chief economist at NAR. "However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market."
Positive signs for June include the total housing inventory, which rose almost 2 percent to 2.19 million existing homes, and Yun added that these conditions will help sellers and price growth. NAR stated that the national median existing-home price was $214,000 for the month, making June the 16 month in a row with a gain, most recently happening prior to the economic downturn from February 2005 to May 2006.
Sales of foreclosed houses are lower as well, possibly helping price growth into the second half of 2013, according to NAR.
Rebound in builder revenue expected
Previously, home builders have struggled to make a profit in the uncertain housing market. This is likely to change, and some indicators show earnings for the second quarter of 2013.
Lennar Corp., an important builder for housing gains, recently posted a profit and reported strong orders, according to The Wall Street Journal. The future signs are good, and demand rose 27 percent over that time, while backlog increased 55 percent to 6,163 homes. The more homes Lennar is asked to build, the better the outlook for the industry as a whole.
Overall, home builder revenue is predicted to pick up. IBISWorld market research forecasted gains of 13.7 percent, and the next five years also look optimistic. Lack of demand for new homes affects all aspects of housing and the economy, and home sales and other aspects need to grow to help fuel an economic recovery.