What the Median Price of Existing Home Sales Means

Thanks to our awesome friend Tammie Crainich at LoanDepot we were able to get this update on the market!

Existing Home Sales, which measure closings on existing homes, rose 1.4% from May to June. On an annual basis, they were up 23% compared to June of 2020, which makes sense given the pandemic-related shutdowns last year.

Inventory still remains a huge challenge for buyers, though we did see an improvement. There were 1.25 million homes for sale, which is up 3.3% from May and this also follows a 7% increase in the previous report. While inventory is still down 19% year over year, it is getting a bit better.

The median home price was reported at a record high $363,300, which is up 23.4% year over year. Though the media might report this otherwise, it’s really important to understand that the median home price is not the same as appreciation. It simply means half the homes sold were above that price and half were below it, and the rise is due to the amount of higher-end homes that are selling. Sales of homes beneath $250,000 were down 15%,while sales of homes over $1 million were up 150%. Real appreciation is around 14%, and while this is still a high number, it is significantly less than the 23.4% rise in the median home price.

First-time homebuyers have accounted for at least 31% of sales over the last 5 months. While affordability is certainly a bit tougher with higher home prices, rates are still very attractive and first-time home buyers are clearly hanging in there.

Meanwhile, cash buyers remained stable at 23%, though this number is up 16% from last year. Investors purchased 14% of homes, down from 17% from May.