Any action movie worth its salt contains a scene with someone clinging to a window ledge with just a few fingers. For two years, the housing market has been in such a state, the combination of high home prices and mortgage rates eroding affordability and exacerbating lock-in effects.
In June, another finger slipped off the sill as the housing market’s strength weakened further — existing-home sales fell 5.4% year over year to a seasonally adjusted annual rate of 3.89 million, even as unsold inventory rose 3.1% from May and 23.4% from one year ago, according to data released today by the National Association of Realtors (NAR).
Existing-home sales also fell 5.4% from May. “We’re seeing a slow shift from a seller’s market to a buyer’s market,” said NAR Chief Economist Lawrence Yun. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
Existing homes sold in June at a rate only 40,000 units above that experienced in October 2023 — when mortgage rates kissed 8% — and 1.5 million units lower than in June 2019. Rates averaged in the high 6s through June, per Freddie Mac data.
Meanwhile, the median existing-home sales price increased 4.1% from June 2023 to $426,900. This represents the second straight month that the median existing-home sales price reached an all-time high and the twelfth consecutive month of year-over-year price gains.
“Supply and demand dynamics are nearing a balanced market condition,” Yun added. “The months supply of inventory reached its highest level in more than four years.” Unsold inventory sits at a 4.1-month supply at the current sales pace, up from 3.7 months in May and 3.1 months in June 2023. The last time unsold inventory posted a four-month supply was May 2020 (4.5 months).
All four major U.S. regions posted annual sales declines and price increases. Existing-home sales in the Northeast June fell 2.1% from May to an annual rate of 470,000, a decline of 6% from June 2023. The median price in the Northeast was $521,500, up 9.7% annually.
In the Midwest, existing home sales decreased 8% from May and 6.1% from June 2023. The median price in the Midwest was $327,100, up 5.5% from June 2023. Existing home sales in the South slid 5.9% from May and 6.9% annually, while sales in the West declined 2.6% from May and were flat from a year ago.
First-time buyers accounted for 29% of sales in June, down from 31% in May, but up from 27% in June 2023. All-cash sales accounted for 28% of transactions in June, flat from May and up from 26% one year ago. Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in June, identical to May and down from 18% in June 2023.
Existing condominium and co-op sales tumbled 7.5% in June to a seasonally adjusted annual rate of 370,000 units, down 14% from one year ago. The median existing condo price was $371,700 in June, up 2.6% from the previous year.
