US Existing Home Sales Fell 2.2% in July, High Mortgage Rates and Tight Inventory Impacting

US existing home sales from the National Association of Realtors decreased 2.2% month-over-month in July to a seasonally adjusted annual rate of 4.07 million (consensus 4.15 million) from an unrevised 4.16 million in June. Sales were down 16.6% from the same period a year ago. Inventory of existing homes for sale remains extremely tight, due partially to the strength of the labor market (and ability to work remotely) and affordability with higher mortgage rates. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of August 17. That’s up from 6.96% the prior week and 5.13% one year ago.

Home Sale

Data for July 2023

Highlights

  • Existing home sales decreased 2.2% month-over-month in July to a seasonally adjusted annual rate of 4.07 million (consensus 4.15 million) from an unrevised 4.16 million in June.
  • Sales were down 16.6% from the same period a year ago.
  • Supply at months 3.3 months vs 3.1 months prior (balanced considered 6 months)
  • Total housing inventory was 1.11 million units, an increase of 3.7% from the previous month.
  • Median sales price $406,700 versus $410.2 K last month.
  • Median sales price is up 1.9% from a year ago
  • Among the four major U.S. regions, sales grew in the West but faded in the Northeast, Midwest and South. All four regions registered year-over-year sales declines.
  • First-time buyers were responsible for 30% of the sales in July up from 27% in June and 29% in July
  • All-cash sales accounted for 26% of transactions in July. It was 24% in July 2022.
  • Individual investors or second-home buyers who make up many cash sales purchased 16% of homes in July down from 18% in June but up from 14% one year ago.
  • Distressed sales – foreclosures and short sales – represented 1% of sales in July unchanged from the prior month and previous year
  • According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of August 17. That’s up from 6.96% the prior week and 5.13% one year ago.
United States Existing Home Sales
United States Existing Home Sales

” 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.”

  • According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of August 17. That’s up from 6.96% the prior week and 5.13% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales slid 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. The median existing single-family home price was $412,300 in July, up 1.6% from July 2022.

Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 420,000 units in July, down 4.5% from June and 19.2% from one year ago. The median existing condo price was $357,600 in July, up 4.5% from the previous year ($342,200).

“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.”

Regional Breakdown

Existing home sales across regions:

  • Existing-home sales in the Northeast -5.9% MoM and down -23.8% from a year ago.
  • In the Midwest, existing-home sales -3.0% MoM at an annual rate of 960,000 in July, dropping 20.0% from the previous year.
  • Existing-home sales in the South -2.6% MoM to an annual rate of 1.86 million in July, a decrease of 14.3% from one year ago.
  • In the West, existing-home sales +2.7% MoM to an annual rate of 770,000 in July, down 12.5% from the prior year.

Median home prices by region year-over-year:

  • The median price in the Northeast was $467,500 up 5.5% from a year ago
  • The median price in the Midwest was $311,800, up 3.9% from July 2022.
  • The median price in the South was $366,200, up 1.7% from July 2022.
  • The median price in the West was $610,500, unchanged from July 2022.

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

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