One-third of the homes purchased in July were on the market for less than a month, while one in five was on the market for at least six months. A home’s median time on the market has been declining steadily since January, the trade group said.
Between 2004 and 2005, the high-flying years of the housing boom, the median selling time of previously occupied homes was four weeks, NAR said. The supply of homes on the market averaged 4.3 months over the same period.
The July figures, which were derived from a monthly survey of the trade group’s real estate agents, are good news for sellers and come as the inventory of homes available for sale has been tightening.
Overall, there were 2.4 million previously owned homes for sale in July, down 24 percent in the past year. It would take about 6.4 months to exhaust that supply at the current sales pace. That’s just above the six-month inventory typical in a healthy economy and 31 percent below the 9.3-month supply in July last year.
“A notable shortening of time on market began this spring, and this has created a general balance between homebuyers and sellers in much of the country,” said Lawrence Yun, the trade group’s chief economist.
Factoring out short sales — when a bank agrees to accept less than what the seller owes on their mortgage — the median time on the market for homes was around six to seven weeks, Yun said.
By comparison, excluding short sales, the median time on the market for homes hit 10 weeks in 2009, during the depths of the economic downturn. At the time, there was a 10-month supply of homes on the market, NAR said.
The trend in homes selling faster also is further evidence that the U.S. housing market is on the mend five years after the housing bubble burst.
The average rate on a 30-year fixed mortgage has been below 4 percent all year, helping to fuel more sales of new and previously owned homes. Sales of previously occupied homes jumped 10 percent in July from a year earlier. Sales of newly built homes, meanwhile, were up 25 percent in the same period.
Home prices also have begun to rise consistently, which could boost sales further in the months to come. The Standard & Poor’s/Case Shiller index for July showed the first year-over-year increase in home prices since September 2010.
Even so, the housing market has a long way to go to reach a full recovery. Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million. That’s still well below the 5.5 million annual sales pace that is considered healthy.
One factor constraining the pickup in sales is many homes that would otherwise be on the market are being held back.
Some of those homes are bank-owned properties.
As of July, there were 1.47 million U.S. homes in some stage of the foreclosure process or owned by banks, according to foreclosure listing service RealtyTrac Inc. Of the 620,751 in lenders’ possession, only about 15 percent are listed for sale.
That’s helped trigger bidding wars and led to higher prices in markets like Las Vegas, where the inventory of bank-owned homes sank to a 6.2-month supply in June.
Many homeowners who would like to sell their home are not placing them on the market because they are worried home prices might dip again. Others can’t sell because they are underwater on their mortgage, meaning they owe more than their home is worth.
In that scenario, the only way they can sell their home is through a short sale, in which a bank agrees to accept less than what is owed on the mortgage. In that case the seller makes nothing on the sale.
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