Existing Home Sales Fell By 5.9% In July

Existing-home sales dropped for the sixth straight month in July, down 5.9% from June and 20.2% YOY, according to the National Association of Realtors’ most recent data.

Sales fell to a seasonally adjusted annual rate of 4.81 million and declined in every major region.

At the same time, inventory of unsold homes increased to 1.31 million, or 3.3 months of inventory at the current sales pace.

“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June. 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. 

The median price for an existing home was up 10.8% YOY to $403,800 but dropped by $10,000 from last month’s record high of $413,800.

But while appreciation is moderating, prices still rose in all regions. This is the 125th consecutive month of YOY price increases, the longest streak on record.

Yun noted that the housing recession can be ascribed to home sales and building, but not prices. Almost 40% of homes are still bought at full list price. This is thanks to tight inventory, which keeps competition high even as many buyers are priced out of the market.

The typical home stayed on the market for 14 days in July, unchanged from June, while 82% of homes sold were on the market for less than a month.

Notably, individual investors or second-home buyers with cash purchased 14% of homes in July, down from 16% in June and 15% YOY.

Investors helped super-charge the housing market over the last two years. But as interest rates have risen and recession risk increases, many are backing away, a move that could accelerate the market’s slowdown.

“I really think investor activity has heightened volatility,” Redfin President & CEO Glenn Kelman told Bloomberg. “Having their activity slow has really changed the market. I wish it were a gentler process, but I don’t mind when prices come back down.”