Supply and mortgage rates continue to impact existing-home sales
Existing-home sales took another step back in July, the National Association of Realtors (NAR) reported this morning.
Total existing-home sales for the month slipped 2.2% from June to a seasonally adjusted rate of 4.07 million.
Year-over-year, sales dropped 16.6% and are down from 4.88 million in July 2022. Sales include completed transactions of single-family homes, townhomes, condominiums, and co-ops.
Single-family home sales declined to a seasonally adjusted annual rate of 3.65 million in July, down 1.9% from 3.72 million in June and 16.3% from the previous year.
“Two factors are driving current sales activity – inventory availability and mortgage rates,” said NAR Chief Economist Lawrence Yun. “Unfortunately, both have been unfavorable to buyers.”
Total housing inventory at the end of July was 1.11 million units, up 3.7% from June but down 14.6% from 1.3 million units for the same period a year ago.
Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022.
The median existing-home price[ or all housing types in July was $406,700, an increase of 1.9% from July 2022 and a median price of $399,000. Prices rose in the Northeast, Midwest, and South but were unchanged in the West, the NAR said.
The median existing single-family home price was $412,300 in July, up 1.6% from July 2022.
“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” Yun said. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”
According to the REALTORS Confidence Index, properties typically remained on the market for 20 days in July, up from 18 days in June and 14 days in July 2022. About 74% of homes sold in July were on the market for less than a month.
All-cash sales accounted for 26% of transactions in July, identical to June but up from 24% in July 2022.
A 30-year fixed mortgage averaged 7.09% as of Aug. 17, according to Freddie Mac. That’s up from 6.96% the prior week and 5.13% one year ago.
“Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again,” Yun said.
Here’s how existing-home sales in July performed on a regional basis:
Existing-home sales in the Northeast descended 5.9% from June to an annual rate of 480,000 in July, down 23.8% from July 2022. The median price in the Northeast was $467,500, up 5.5% from one year ago.
- In the Midwest, existing-home sales decreased by 3.0% from the prior month to an annual rate of 960,000 in July, dropping 20.0% from the previous year. The median price in the Midwest was $304,600, up 3.9% from July 2022.
- Existing-home sales in the South retracted 2.6% from June to an annual rate of 1.86 million in July, a decrease of 14.3% from one year ago. The median price in the South was $366,200, up 1.7% from July 2022.
- In the West, existing-home sales increased 2.7% from the previous month to an annual rate of 770,000 in July, down 12.5% from the prior year. The median price in the West was $610,500, unchanged from July 2022.
