Homes Sales in the Northeast Increased by over 25% in July 2020

Homes Sales in the Northeast Increased by over 25% in July 2020

SILVER SPRING, Md. (AP) — More Americans signed contracts to buy homes in July, suggesting the current hot housing market could continue in the fall.

The National Association of Realtors said Thursday that its index of pending sales rose 5.9 percent, to 122.1 last month. It had plunged to a low of 69 in April when buyers and sellers were forced to the sidelines by coronavirus closures and restrictions. An index of 100 represents the level of contract activity in 2001.

Contract signings are a barometer of eventual, finalized purchases over the next two months, so this month’s numbers point to continued market strength in August and September.

Contract signings are now 15.5 percent ahead of where they were last year, after significantly trailing last year’s pace earlier in the year because of the pandemic. All four regions saw more contract signings for the second straight month. The Northeast saw contract signing increase 25.2 percent; in the West, they were up 6.8 percent. The Midwest saw gains of 3.3 percent and in the South contract signings were up 0.9 percent.

Different reports over the past week have shown that sales of existing homes and new homes are both continuing to surge as large swaths of the country have opened back up this summer and people have figured out how to go about the regular business despite the ongoing pandemic. Sales of new homes jumped 13.9 percent in July, while sales of existing homes climbed 24.7 percent.

Low-interest rates have also pushed people into the market. Interest rates on a 30-year fixed-rate mortgage are at historic lows around 3 percent.

Besides the uncertainty of the broader economy, which continues to see about a million people a week sign up for unemployment benefits, the biggest concern in the housing market is the continuing lack of available homes. The low supply of existing homes has forced buyers into the new-home market, which has also seen its supply dwindle over the past year.

The number of single-family homes on the market in Greater Boston in July reflected a 27.2 percent year-over-year decrease and a 3.3 percent drop since June, according to a report the Greater Boston Association of Realtors released Wednesday. The condo market, however, saw an 18.3 percent increase in active listings year over year and a 9.2 percent rise since June 2019.

During the first half of 2020, commercial and multifamily starts in Boston declined by 30 percent to $3 billion, according to the latest report from Dodge Data & Analytics. Multifamily starts here dropped 10 percent on a year-to-date basis. The largest multifamily projects to get underway were the $150 million Cambridge Crossing (Parcel I) complex in Cambridge and the $115 million Woburn Avalon Bay project in Woburn.

That shortage of homes for sale is boosting prices. The median price for an existing home topped $300,000 for the first time on record in the United States, coming in at $304,100. That’s up a sharp 8.5 percent from July 2019. The median price for a new home in July rose to $330,600, up 7.2 percent from one year ago.

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