Home sales in the United States surged at a record pace for a second straight month in July as historically low interest rates boosted demand for homes even as the pandemic put millions of people out of work.
The National Association of Realtors (NAR) said in a report Friday that existing home sales rose 24.7 percent to a seasonally-adjusted annual rate of 5.86 million units in July, following an earlier record monthly increase in June of 20.7 percent. Economists polled by Reuters forecast sales rising 14.7 percent, so the NAR numbers are a surprise to the upside.
“The housing market is well past the recovery phase and is now booming with higher home sales compared to the pre-pandemic days,” said Lawrence Yun, NAR’s chief economist. “With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”
Sales of existing homes, which make up about 85 percent of all home sales in the United States, rose 8.7 percent on a year-on-year basis in July, the NAR report showed.
The median price of a home sold in July rose to $304,100, which is both a record high in nominal terms and when adjusted for inflation.
“Homebuyers’ eagerness to secure housing has helped rejuvenate our nation’s economy despite incredibly difficult circumstances,” said NAR President Vince Malta, in a statement. While admitting there is still “a way to go” before the economy bounces back to pre-pandemic levels, Malta expressed confidence in “an impressive recovery.”
White House economic adviser Larry Kudlow told Fox News on Thursday that he expects the economy to grow by over 20 percent in the final quarters of 2020 and that predictions for a sharp, V-shaped recovery remain valid.
“Twenty-percent-plus growth in the third and fourth quarters. You can score that,” Kudlow said in an interview with FOX Business’ “Varney & Co.” “We’re going to have a big bang year next year when the president puts in his free-market reward success policy.”
The NAR report comes on the heels of a Commerce Department announcement that new home construction surged by 22.6 percent last month, reinforcing the view that America’s housing market is a bright spot in the economic crisis triggered by the Chinese Communist Party (CCP) virus pandemic.
Housing activity has remained strong even as other sectors of the economy continue to suffer amid widespread COVID-19 infections that have slowed commerce and kept unemployment high. More than 28 million people were collecting jobless benefits at the end of July.
The pandemic tipped the economy into recession in February, ending a record-long economic expansion that drove unemployment down to a 50-year low.
After joblessness surged to a record high of 14.7 percent in April, it ticked down and in July was 10.2 percent.
Reuters contributed to this report.