Existing-home sales fell for the fifth consecutive month in June as homebuyer purchasing power was sapped by higher home prices and interest rates, the National Association of REALTORS® said.
At the same time, total housing inventory rose 9.6% on a month-over-month basis to 1.26 million units.
Total existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, slid 5.4% from May to a seasonally adjusted annual rate of 5.12 million in June. Year over year, sales volume was down 14.2% from 5.97 million transactions in June 2021.
“Falling housing affordability continues to take a toll on potential home buyers,” NAR chief economist Lawrence Yun said in a press release. “Both mortgage rates and home prices have risen too sharply in a short span of time.”
The median existing-home price for all housing types in June was $416,000, up 13.4% from a year before, as median prices rose in each region.
June’s unsold inventory represented a 3-month supply at the current sales pace, up from 2.6 months in May and 2.5 months last year.
Properties typically remained on the market for 14 days in June, the fewest days since NAR began tracking the metric in May 2011. Homes were on the market for 16 days in May and 17 days in June 2021. Eighty-eight percent of homes sold in June were on the market for less than a month.
“Finally, there are more homes on the market,” Yun said. “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.”
By property type, single-family home sales in June slid to a seasonally adjusted annual rate of 4.57 million, down 4.8% from 4.8 million in the previous month and down 12.8% from a year earlier. The median existing single-family home price was $423,300, up 13.3% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 550,000 units in June, down 9.8% from May and 24.7% compared to June 2021. The median existing condo price rose 11.5% year over year to $354,900.
In June, first-time buyers were responsible for 30% of sales, up from 27% in May and down from 31% in June 2021, while individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes, equal to May and up from 14% in June 2021.
“We are now seeing some evidence of inventory levels starting to pick up across the country, but still consistently below pre-pandemic levels,” Keller Williams chief economist Ruben Gonzalez said. “It seems likely that we will return to a pace of home sales more consistent with pre-pandemic levels, but we also see long-term demographic trends which will continue to keep demand for homeownership growing over the next decade.”
Existing-home sales declined for the fourth month in a row in May, as the median price for existing homes hit another record high, the National Association of Realtors said.
Total existing-home sales, which are completed transactions including single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Year over year, however, sales were up 44.6% from 4.01 million in May 2020.
The median existing-home price for all housing types in May was $350,300, up 23.6% on an annual basis, as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012, the NAR said in a press release.
Total housing inventory at the end of May stood at 1.23 million units, up 7% from April and down 20.6% from a year earlier. May’s inventory represents a 2.5-month supply at the present sales pace, slightly higher than April’s 2.4-month supply but down from 4.6 months in May 2020.
Properties typically remained on the market for 17 days in May, flat from April but down from 26 days in May 2020. Eighty-nine percent of homes sold in May were on the market for less than a month.
“Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market,” NAR chief economist Lawrence Yun said in the release. “The market’s outlook, however, is encouraging. Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”
By property type, single-family home sales dropped to a seasonally-adjusted annual rate of 5.08 million, down 1% from 5.13 million in April and up 39.2% from a year ago. The median existing single-family home price was $356,600, up 24.4% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally-adjusted annual rate of 720,000 units, unchanged from April but up 100% from a year ago. The median existing condo price rose 21.5% year over year to $306,000 in May.