ST. JOSEPH — Southwest Michigan housing sales took a step backward in July from a year ago, dropping by 19 percent.
July home sales fell 14 percent compared to June, while the number of houses sold year-to-date was one house higher in July 2019.
The same could not be said for the prices of these homes.
“The average selling price in July 2019 for houses sold in our area was up 10 percent at $251,423, compared to $228,965 in July 2018,” said Alan Jeffries, association executive of the Southwestern Michigan Association of Realtors. “Year-to-date, the average selling price increased by just 4 percent.”
The median selling price soared 21 percent to $200,000 in July 2019 from $165,750 in July 2018. Year-to-date, the median selling price rose 9 percent.
Even with the increased selling prices, the decline in the number of home sales lowered the total dollar volume by 11 percent. Year-to-date, the total dollar volume was up 4 percent.
The inventory of houses for sale dropped 3 percent below that in July 2018 – 1,840 available for sale compared to 1,892 in 2018. At 1,840 houses, the market had a 7.4-month supply of homes for sale.
In July 2010, the market had an 18.1-month supply.
The number of bank-owned or foreclosed homes as a percentage of all transactions dropped to 3 percent for the second time in 2019.
This was the lowest percentage since 2009. The previous lowest percentage in July was 4 percent in 2018 and 2017. The highest percentage in July was 35 percent in 2009.
Locally, the mortgage rate decreased to 3.96 from 4.02 in June. Last year in July, the rate was 4.68. Nationally, the Freddie Mac mortgage rate in July increased slightly to 3.75 from 3.73 in June for a 30-year conventional mortgage.
Across the U.S.
According to the National Association of Realtors, existing-home sales improved in July – a stark contrast after sales were down slightly in June.
Total existing-home sales rose 2.5 percent from June to a seasonally adjusted annual rate of 5.42 million in July. Overall sales were up 0.6 percent from a year ago nationwide.
“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s chief economist. “(But) the shortage of lower-priced homes have markedly pushed up home prices.”
Of the homes that were sold in 2018 that were bought in 2012 in 13 large metro areas, the lower half of the market increased by more than 100 percent.
The median home price for homes purchased in the upper half of the market in these same metro areas in 2012 increased at a much slower pace when sold in 2018.
“Clearly, the inventory of moderately-priced homes is inadequate, and more home building is needed,” Yun said. “Mortgage rates are important to consumers, but so is confidence about the nation’s overall economic outlook. Home buying is a serious long-term decision, and current low or even lower future mortgage rates may not in themselves meaningfully boost sales unless accompanied by improved consumer confidence.”
Regionally, existing-home sales in the Midwest edged up 1.6 percent to an annual rate of 1.27 million, which is a 0.8 percent increase from July 2018.
Nationally, the total housing inventory at the end of July decreased to 1.89 million, down from 1.92 million existing-homes available for sale in June, and a 1.6 percent decrease from 1.92 million one year ago.
Unsold inventory is at a 4.2-month supply at the current sales pace, down from the 4.4 month-supply recorded in June and down from the 4.3-month supply recorded in July of 2018.
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