July US existing home sales from the National Association of Realtors fell 5.9% month-over-month in July to a seasonally adjusted annual rate of 4.81 million versus a downwardly revised 5.11 million (from 5.12 million) in June. This was the sixth straight month of declines. The last time sales declined for six consecutive months was between August 2013 and January 2014, according to NAR. Median sale price eased last month to $403,800 from June record of $413,800. Higher interest rates are creating affordability pressures for prospective buyers. This is becoming an even bigger factor, the 30-year fixed-rate mortgage edged down to 5.13% this week but remained near multiyear highs, according to Freddie Mac.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.41% in July, down from 5.52% in June. The average commitment rate across all of 2021 was 2.96%. This sequence has been 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.
Sellers in many markets are cutting list prices, but prices are still up significantly from year-ago levels. The median existing-home price rose 10.8% in July from a year earlier to $403,800, NAR said. That is lower than June’s revised record price of $413,800. Prices tend to drop in July, said Lawrence Yun, NAR’s chief economist.
Existing home sales data for July 2022
Highlights
- Existing home sales decreased 5.9% month-over-month in July to a seasonally adjusted annual rate of 4.81 million (consensus 4.85 million) versus a downwardly revised 5.11 million (from 5.12 million) in June.
- That is the sixth straight month that existing home sales have fallen.
- Total sales in July were down 20.2% from a year ago.
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.
- Median existing-home price for all housing types was $403,800, up 10.8% from July 2021
- Total housing inventory increased 4.8% to 1,310,000 units.
- Single-family home sales declined 5.5% to 4.31 million
- Co-ops were down 9.1% to 500,000 units.
- In July shows that the largest year-over-year median list price growth occurred in Miami (+36.2%), Memphis (+32.7%) and Orlando (+28.4%).
- Phoenix reported the highest increase in the share of homes that had their prices reduced compared to last year (+31.8 percentage points), followed by Las Vegas (+28.6 percentage points) and Austin (+27.8 percentage points).
“Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers” said NAR Chief Economist Lawrence Yun.” “We’re witnessing a housing recession in terms of declining home sales and home building,” “However, 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.”
Regional Breakdown
- Existing-home sales in the Northeast slid to an annual rate of 620,000 in July, down 7.5% from June and 16.2% from July 2021. The median price in the Northeast was $444,000, an increase of 8.1% from the previous year.
- Existing-home sales in the Midwest declined 3.3% from the prior month to an annual rate of 1,190,000 in July, dropping 14.4% from July 2021. The median price in the Midwest was $293,300, up 7.0% from the previous year.
- Existing-home sales in the South waned 5.3% in July to an annual rate of 2,130,000, down 19.6% from one year ago. The median price in the South was $365,200, an increase of 14.7% from July 2021.
- Existing-home sales in the West retracted 9.4% compared to last month to an annual rate of 870,000 in July, down 30.4% from this time last year. The median price in the West was $614,900, an 8.1% jump from July 2021.
“The action is in the pricey West region which experienced the sharpest sales decline combined with a sizable inventory increase,” Yun said. “It’s likely some Western markets will see prices decline, and that will be welcome news for buyers who watched rapid price jumps during the past two years.”
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.
Source: NAHB
From The TradersCommunity News Desk