Good News For Housing This Month has released its July Real Estate Nowcast which projects that existing home sales for the month of July will fall between seasonally adjusted annual rates of 5.49 and 5.84 million annual sales, with a targeted number of 5.67 million – up 3.2 percent from June and 11.7 percent from a year ago.

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“May and June existing home sales have both been very encouraging for anyone looking for proof that the housing market is in recovery, and our July nowcast indicates that this positive momentum will continue into July,” said Executive Vice President Rick Sharga. “One potential area of concern is the steeper-than expected increase in home prices. While this is driven by limited inventory, and a declining number of distressed home sales, affordability may start to become an issue if home price increases continue to outpace wage growth. And if the Fed does move to raise interest rates as expected this fall, we could see home sales volume begin to weaken.”

Earlier today, the National Association of Realtors® (NAR®) released its existing home sales data for June, reporting that home sales were at 5.49 million units – a 3.2 percent increase from May’s sales and the highest level in eight years. The sharp increase was in line with’s June nowcast point estimate of 5.55 million (revised downward from 5.57 million) – a prediction that beat the consensus estimate, whose high end range of 5.45 million was below the actual level of sales. The NAR also revised downward its May report to 5.32 million from its original estimate of 5.35, nearly matching’s nowcast estimate of 5.31 for that month.

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NAR also reported a June increase in existing home prices to $236,400 – a 6.5 percent leap from one year ago and besting the previous all-time high of $230,400 set in July 2006, meaning that from a price perspective, the housing recovery has shifted to an expansion. This number was well within the range of $217,482 and $240,375 that predicted last month.

Findings from the Real Estate Nowcast suggest that sales prices for existing homes will fall between $227,170 and $251,082 in the month of July, with a targeted price of $239,126. This represents a 4.6 month-over-month and a 7.7 percent year-over-year increase for the month, and would set another record for median home prices.

While the first time homebuyer percentage slipped slightly to 30 percent from 32 percent in June according to the NAR data, it remains higher than earlier in the recovery. “First time homebuyers will continue to be challenged in an environment with limited entry level inventory, tight credit and rapidly-rising prices,” Sharga noted. Additionally, all-cash sales, the best indicator of true investor purchases, continued to drop, falling to 22 percent in June, from 24 percent in the previous month and 32 percent the year before.

“This is not surprising given the big increases in prices that are making return hurdles harder and harder to meet,” said Chief Economist Peter Muoio. “This is the lowest level of all-cash sales since December 2009. Similarly, distressed sales accounted for just 8 percent in June, matching an August 2014 low. Taken together these indicators signify a housing recovery on more solid ground, with fickle investors playing a smaller role, the vast majority of sales non-distressed, prices back to pre-bust levels and sales increasing sharply.”