Sales of existing homes jumped 24.7 percent in July, after a 20.7 percent increase in June. Both of those were record increases.

Existing home sales were 5.86 million at a seasonally-adjusted annualized rate in July, up from 4.70 million in June and a trough of 3.91 million in May. July was the best month for existing home sales since December 2006.

The median sale price for an existing home rose to $304,100, up a very strong 8.5 percent from one year earlier. Tight supplies are pushing up home prices; inventories of existing homes for sale in July were just 3.1 months at the current sales pace, close to a record low.

A number of factors are driving the very strong housing market. After years of slow sales following the housing market bust, demand for homes was good and increasing ahead of the coronavirus pandemic, and many of those potential buyers have come now back into the market. Record-low mortgage rates have boosted demand. And it could be that the pandemic has increased demand for single-family living.

Housing will be a driver of economic recovery through the rest of this year and throughout 2021, due to an improving labor market and extremely low mortgage rates. The big question is whether supply will be large enough to meet demand. Strong sales will support solid price gains for existing homes over the medium term.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com.