For the sixth month in a row, existing-home sales declined, according to the National Association of Realtors® (NAR). According to NAR Chief Economist Lawrence Yun, “home sales may soon stabilize since mortgage rates have fallen to nearly 5%, thereby giving an additional boost of purchasing power to home buyers.”
Price Growth Slowing
In another boost of purchasing power to buyers, the peak of home selling prices appears to have passed. Though prices have seen year-over-year increases for the past 125 consecutive months, prices declined $10,000 from June’s record-high price of $413,800.
Inventory Increasing
The decline in home prices from June to July can partially be explained by an increase in supply. By the end of July, total housing inventory reached 1,310,000 units, up 4.8% from a month earlier. At the current sales pace, this level of inventory would supply the market for 3.3 months, up from only 2.9 months in June. Though inventory may be starting to increase, Yun still sees signs of a housing recession in terms of declining home sales and home building. “However,” he added, “it’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
Home Sales Declining
Existing-home sales fell 5.9% from a month ago and 20.2% from a year ago. This drop in demand from home buyers may result in some sellers being more motivated for a sale. Yet despite declining demand, properties sold in record time in July. The average property remained available for sale for just 14 days, unchanged from June and down from 17 days in July 2021.
Market Snapshot
In the southern region of the U.S. existing- home sales annual rate of 2.13 million; this was a drop of 5.3% and 19.6% month-over-month and year-over-year, respectively. The median sales price rose 14.7% from July 2021 and is now $365,200.
