The ongoing shortage of homes for sale has turned the first half of 2023 into a “downer.”
Existing-home sales slipped 3.3% in June to the lowest level in five months, the National Association of Realtors (NAR) said Thursday.
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums, and co-ops — receded from May to a seasonally adjusted annual rate of 4.16 million in June, a level not seen since January. Year-over-year, sales fell 18.9% from 5.13 million in June 2022.
Sales varied among the four major U.S. regions, with the Northeast posting gains, the Midwest holding steady, and the South and West reporting decreases. All four regions recorded year-over-year sales declines.
"The first half of the year was a downer for sure, with sales lower by 23%," said NAR Chief Economist Lawrence Yun. "Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably."
Inventory Unchanged
Total housing inventory at the end of June was 1.08 million units, the same as in May but down 13.6% from a year earlier (1.25 million). Unsold inventory sat at a 3.1-month supply at the current sales pace, up from 3 months in May and 2.9 months in June 2022.
"There are simply not enough homes for sale," Yun added. "The market can easily absorb a doubling of inventory."
The median existing-home price for all housing types in June was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600). Prices rose in the Northeast and Midwest, but waned in the South and West.
"Home sales fell, but home prices have held firm in most parts of the country," Yun said. "The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month."
Properties typically remained on the market for 18 days in June, identical to May but up from 14 days in June 2022. Of the homes sold in June, 76% were on the market for less than a month.
First-time buyers were responsible for 27% of sales in June, down from 28% in May and 30% in June 2022. NAR's 2022 Profile of Home Buyers and Sellers — released in November 20224 — found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 26% of transactions in June, up from 25% in both May 2023 and June 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.
Distressed sales — foreclosures and short sales — represented 2% of sales in June, virtually unchanged from last month and the prior year.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.96% as of July 13, up from 6.81% the previous week and 5.51% one year ago.
Single-family home sales decreased to a seasonally adjusted annual rate of 3.72 million in June, down 3.4% from 3.85 million in May and 18.8% from the previous year. The median existing single-family home price was $416,000 in June, down 1.2% from June 2022.
Existing condo and co-op sales recorded a seasonally adjusted annual rate of 440,000 units in June, down 2.2% from May and 20% from a year ago. The median existing condo price was $361,600 in June, up 1.9% from the previous year ($354,800).
Regional Breakdown
Existing-home sales in the Northeast grew 2% from May to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price in the Northeast was $475,300, up 4.9% from the prior year.
In the Midwest, existing-home sales were unchanged from one month ago at an annual rate of 990,000 in June, slumping 19.5% from one year ago. The median price in the Midwest was $311,800, up 2.1% from June 2022.
Existing-home sales in the South faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price in the South was $366,600, down 1.2% from June 2022.
In the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price in the West was $606,500, down 3.4% from June 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.
