Sales fell for the 5th month in a row as prices rose 13.4%. NAR economist says homes priced right sell quickly, but ones priced too high now “deter prospective buyers.”
WASHINGTON – Existing-home sales dropped for the fifth straight month in June, according to the National Association of Realtors® (NAR).
Three out of four major U.S. regions NAR identifies in its monthly study saw month-over-month sales declines while one region held steady. Year-over-year sales sank in all four regions.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – dipped 5.4% from May to a seasonally adjusted annual rate of 5.12 million in June. Year-over-year, sales fell 14.2% (5.97 million in June 2021).
The market takes a toll on homebuyers, says NAR Chief Economist Lawrence Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.”
Inventory: Total housing inventory at the end of June was 1,260,000 units – an increase of 9.6% from May and a 2.4% rise year-to-year. Unsold inventory sits at a 3.0-month supply at the current sales pace, up from 2.6 months in May and 2.5 months in June 2021. Many economists consider a 6-month inventory a “balanced market,” with the number of buyers roughly equal to the number of sellers.
Prices: The median existing-home price for all housing types in June was $416,000, up 13.4% from June 2021 ($366,900), with prices up in all regions. Home prices have now gone up for 124 consecutive months – the longest-running streak on record.
Time to contract: Properties typically remained on the market for 14 days in June, down from 16 days in May and 17 days in June 2021. The 14 days on market are the fewest since NAR began tracking it in May 2011. Eighty-eight percent of homes sold in June 2022 were on the market for less than a month.
“Finally, there are more homes on the market,” Yun says. “Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
First-time buyers were responsible for 30% of sales in June, up from 27% in May and down from 31% in June 2021.
All-cash sales accounted for 25% of transactions in June, the same as in May and up from 23% one year earlier.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in June, unchanged from May and a slight increase from 14% in June 2021.
Distressed sales – foreclosures and short sales – represented less than 1% of sales in June, essentially unchanged from May 2022 and June 2021.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.52% in June, up from 5.23% in May. The average commitment rate across all of 2021 was 2.96%.
“If consumer price inflation continues to rise, then mortgage rates will move higher,” Yun says. “Rates will stabilize only when signs of peak inflation appear. If inflation is contained, then mortgage rates may even decline somewhat.”
Single-family and condo/co-op sales: Single-family home sales declined to a seasonally adjusted annual rate of 4.57 million in June, down 4.8% from 4.80 million in May and down 12.8% year-to-year. The median existing single-family home price was $423,300 in June, up 13.3% from June 2021.
Existing condominium and co-op sales were at a seasonally adjusted annual rate of 550,000 units in June, down 9.8% from May and 24.7% year-to-year. The median existing condo price was $354,900 in June for an annual increase of 11.5%.
Regional breakdown: At an annual rate of 670,000 in June, existing-home sales in the Northeast were unchanged from May and down 11.8% from June 2021. The median price in the Northeast was $453,300, a 10.1% jump year-to-year.
Existing-home sales in the Midwest slid 1.6% from the previous month to an annual rate of 1,230,000 in June, down 9.6% from June 2021. The median price in the Midwest was $306,900, a 10.2% increase year-to-year.
Existing-home sales in the South slipped 6.2% in June to an annual rate of 2,260,000, a 14.1% year-to-year decline. The median price in the South was $374,900, a 16.8% increase year-to-year.
For the 10th consecutive month, the South recorded the highest pace of price appreciation compared to the other three regions.
Existing-home sales in the West decreased 11.1% compared to the month before at an annual rate of 960,000 in June, a 21.3% drop from this time last year. The median price in the West was $624,000, an increase of 9.6% year-to-year.
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