For a sixth consecutive month, the volume of existing home sales fell by 5.9% in July from June to a seasonally adjusted annual rate of 4.81 million, according to the National Association of Realtors (NAR). Home sales are down a whopping 20.2% compared to July of 2021.
The median home sale price rose another 10.8% from a year ago to $403,800, but is down slightly from last month’s shocking and historic high of $413,800.
In June, we experienced another record as average days on market hit 14 days, where it remains for July.
“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said NAR Chief Economist, Dr. 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.”
It has become popular to opine as to whether or not we’re in a recession, which some say we are because of two consecutive quarters of GDP decline, but others point to extremely positive jobs numbers which is gumming up the works, so to speak.
The same goes for housing – it has become fashionable to proclaim the sky is falling and that the housing market will crash, but numbers in the housing sector are also not all lined up neat row.
“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun added. “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.”
Again, this economy has many negative signals, so the positives of asset appreciation and great unemployment rates is making forecasting more complicated. Further complicating matters is that each region is experiencing sales and pricing changes unevenly.
Existing home sales in the Northeast fell 7.5% from June, and down 16.2% from July 2021, with a median price increase of 8.1% to $444,000 from last year.
In the Midwest, sales dipped 3.3% from June and 14.4% from July 2021, with a median price increase of 7.0% over the year to $293,300.
The South experienced a decline of 5.3% in sales for the month, and 19.6% for the year, and median prices rose 14.7% from July 2021 to $365,200.
“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.”
Existing-home sales in the West slid 9.4% for the month, and 30.4% for the year, while the median price rose 8.1% from July 2021 to $614,900.