June US existing home sales from the National Association of Realtors fell 5.4% to 5.12 million below market forecasts of 5.40 million. This was the fifth straight month of declines. Higher interest rates are creating affordability pressures for prospective buyers. Total sales in June were down 14.2% from a year ago. This is becoming an even bigger factor, 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%. This is the highest level since November 2008 and well above the 3.11% recorded near the start of the year.
Existing home sales drop in June as the supply of available homes for sale remains extremely tight, yet higher mortgage rates and home price inflation are contributing to a slowdown in buyer demand rooted in affordability pressures that are expected to persist.
Existing home sales data for June 2022
- US June existing home sales dropped 5.4% to a seasonally adjusted annual rate of 5.12 million in June of 2022, a new low since June of 2020 and well below market forecasts of 5.40 million.
The median existing-home price for all housing types was $416,000, up 13.4% from June 2021 and the highest since records began in 1999.
- Total housing inventory increased 9.6% from May to 1,260,000 units or the equivalent of 3.0 months at the current monthly sales pace.
- Single-family home sales declined 4.8% to 4.57 million and those of existing condominium and co-ops were down 9.8% to 550,000 units.
- 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.
- First-time buyers were responsible for 30% of sales in June, up from 27% in May and down from 31% in June 2021.
- NAR’s 2021 Profile of Home Buyers and Sellers released in late 2021 reported that the annual share of first-time buyers was 34%.
- All-cash sales accounted for 25% of transactions in June, the same share as in May and up from 23% in June 2021.
- 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.
“Falling housing affordability continues to take a toll on potential home buyers,” said NAR Chief Economist Lawrence Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.” “Finally, there are more homes on the market,” Yun added. “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.”
- 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 from one year ago.
- Existing-home sales in the Midwest slid 1.6% from the previous month to an annual rate of 1,230,000 in June, retreating 9.6% from June 2021. The median price in the Midwest was $306,900, a 10.2% increase from one year before.
- Existing-home sales in the South slipped 6.2% in June to an annual rate of 2,260,000, down 14.1% from the previous year. The median price in the South was $374,900, a 16.8% bounce from one year ago. For the tenth consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions.
- Existing-home sales in the West decreased 11.1% compared to the month before to an annual rate of 960,000 in June, down 21.3% from this time last year. The median price in the West was $624,000, an increase of 9.6% from June 2021.
The National Association of Realtors® is America’s largest trade association, representing more than 1.5 million members involved in all aspects of the residential and commercial real estate industries.
Existing home sales account for 90% of US transactions and are calculated on a contract close basis. New home sales account for the remaining 10% and are based on contract signings.
Existing-home sales include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.
Existing-home sales, based on closings, differ from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.
From The TradersCommunity News Desk