US home market slips, but prices and sales jump in Massachusetts

Buying News
A home with a sold sign in North Reading. Elise Amendola/Associated Press

WASHINGTON — US sales of existing homes slipped for the fourth consecutive month, declining 0.7 percent in July to the slowest pace in more than two years as the real estate market shows signs of cooling.

But the Massachusetts numbers tell a different story.

Closed sales of single-family homes in the state last month were up 3.3 percent compared with July 2017, with a medium sales price of $423,250, according to the Massachusetts Association of Realtors. That’s a 7.2 percent increase over the median home price in July 2017. Condo sales were up 1.3 percent over last July, and the median sales price was up 7.8 percent to $398,950.

Closed sales for single-family homes have been down or flat for 11 of the past 13 months, the association reported.

“It was good to see the number homes that closed in July go up over last year,” Rita Coffey, association president and general manager of Century 21 Tullish & Clancy in Weymouth, said in a news release. “We just need the number of homes for sale to go up. Prices are near all-time highs, and the big question remaining is whether this is sustainable or not. Only time will tell, but the bottom line still remains, we need more housing production.”

The inventory of single-family homes on the market was down 15.2 percent over July 2017; condos saw a 20.3 percent drop. It was the lowest number of homes for sale in both categories for the month of July, the association said.

And in this seller’s market, homes are being snapped up faster. Single-family homes spent an average of 45 days on the market in Massachusetts, nearly a week less than in July 2017. Condos were sold after 41 days, five fewer than in July 2017.

The national picture was not as rosy. Existing home sales fell in the Northeast, Midwest, and South last month, although they increased in the pricier West market.

The National Association of Realtors said Wednesday that homes sold last month at a seasonally adjusted annual pace of 5.34 million. Home sales have fallen 1.5 percent during the past 12 months.

The US housing market is hurt by a widening wealth gap, as inventories of lower-priced homes remain tight. Sales of single-family houses worth more than $500,000 have jumped in the past year, led by a 16.2 percent surge in sales of houses valued at more than $1 million. But homes priced between $100,000 and $250,000 have barely budged, while sales of homes for less than $100,000 have plunged 10.6 percent from a year ago.

Inventories did stabilize in July at 1.92 million existing homes available, which was unchanged from a year ago. Prior to last month, home listings had declined on an annual basis for the past three years.

Would-be buyers are coping with higher mortgage rates than a year ago and home-price growth that has consistently outpaced average wage gains.

The median sales price in July increased 4.5 percent from a year ago to $269,600.

The average interest rate charged on a 30-year fixed-rate mortgage was 4.53 percent last week, up from 3.89 percent a year ago, according to mortgage buyer Freddie Mac.

“Higher mortgage rates and fading consumer sentiment have weighed down activity this summer,” Len Kiefer, deputy chief economist at Freddie Mac said in a statement. “Looking ahead, it’s important to keep in mind that the decline in sales is modest (less than 2 percent year over year). The broader economy, including the crucial labor market, remains robust. With mortgage rates stabilizing over the summer, look for housing market activity to see modest growth later this year.”

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