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Existing-Home Sales Fell Again In July

David Krechevsky
Aug 18, 2022
Homes for sale

Median house price was $403,800, up nearly 11% YOY, but down from June.

KEY TAKEAWAYS
  • Existing-home sales fell 5.9% from June, the sixth-straight monthly decline, and 20.2% from one year ago.
  • The median existing-home sales price climbed 10.8% from one year ago to $403,800. That's down $10,000, however, from last month's record high of $413,800.
  • The inventory of unsold existing homes rose to 1.31 million by the end of July, or the equivalent of 3.3 months at the current monthly sales pace.

Sales of existing homes fell nearly 6% in July, the sixth straight-monthly decline, with all four U.S. regions recording fewer sales, the National Association of Realtors said today.

Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — slipped 5.9% in July from June to a seasonally adjusted annual rate of 4.81 million, according to NAR's report. Year-over-year, sales fell 20.2% (from 6.03 million in July 2021).

"The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June," said NAR Chief Economist Lawrence Yun. "Home sales may soon stabilize, since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers."

Total housing inventory at the end of July was 1.31 million units, up 4.8% from June and unchanged from the previous year, NAR said. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 2.9 months in June and 2.6 months in July 2021.

The median existing-home price for all housing types in June was $403,800, up 10.8% from July 2021 ($364,600), as prices increased in all regions. It was the 125th consecutive month of year-over-year increases, the longest streak on record.

"We're witnessing a housing recession in terms of declining home sales and home building," Yun said. "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."

Properties typically remained on the market for 14 days in July, the same as in June and down from 17 days in July 2021. The 14 days on market are the fewest since NAR began tracking it in May 2011. NAR said 82% of homes sold in July 2022 were on the market for less than a month.

Other Key Highlights from the report:

  • First-time homebuyers were responsible for 29% of sales in July, down from 30% in both June and July 2021. NAR's 2021 Profile of Home Buyers and Sellers — released in late 20214 — reported that the annual share of first-time buyers was 34%.
  • All-cash sales accounted for 24% of transactions in July, down from 25% in June, but up from 23% in July 2021.
  • Individual investors or second-home buyers, who make up many cash sales, purchased 14% of homes in July, down from 16% in June and 15% in July 2021.
  • Distressed sales — foreclosures and short sales — represented approximately 1% of sales in July, essentially unchanged from June 2022 and July 2021.

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%.

Realtor.com's Market Trends Report in July shows that the largest year-over-year median list price growth occurred in Miami (+36.2%), Memphis, Tenn., (+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, Texas (+27.8 percentage points).

Single-family, Condo/Co-op Sales

Sales of existing single-family homes declined to a seasonally adjusted annual rate of 4.31 million in July, down 5.5% from June and down 19% from last year. The median existing single-family home price was $410,600 in July, up 10.6% from July 2021.

Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 500,000 units in July, down 9.1% from June and down 29.6% from a year ago. The median existing condo price was $345,000 in July, an annual increase of 9.9%.

"Buying a home remains a worthwhile investment that brings an unmatched combination of security, freedom, and accomplishment associated with the American Dream," said NAR President Leslie Rouda Smith, a Realtor from Plano, Texas, and a broker associate at Dave Perry-Miller Real Estate in Dallas.

By Region

Sales of existing homes 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, up 8.1% from last year.

Existing-home sales in the Midwest declined 3.3% from the prior month to an annual rate of 1.19 million in July, down 14.4% from July 2021. The median price in the Midwest was $293,300, up 7% from the previous year.

Existing-home sales in the South fell 5.3% in July to an annual rate of 2.13 million, down 19.6% from a year earlier. The median price in the South was $365,200, up 14.7% from July 2021.

Existing-home sales in the West fell 9.4% compared to June, 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.

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