Existing-home sales fell for the sixth consecutive month in July, although recent moderation in mortgage rates could bring some equilibrium to the market, the National Association of REALTORS® said.
At the same time, the median existing-home price fell by $10,000 from June to $403,800, and total housing inventory rose 4.8% on a month-over-month basis to 1.31 million units.
Total existing-home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, slid 5.9% from June to a seasonally adjusted annual rate of 4.81 million in July. Year over year, sales volume was down 20.2% from 6.03 million transactions in June 2021.
“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” NAR chief economist Lawrence Yun said in a press release. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers.”
Neda Navab, president of national brokerage operations for Compass, had a similar take, noting that while July’s lower home sales were commensurate with the earliest days of the pandemic, there is reason for optimism in light of recent economic news.
“July data represents transactions that began in April, May and June — arguably the height of economic uncertainty caused by rising mortgage rates, rising inflation and rising gas prices,” Navab said. “But more-recent economic developments have been more positive — including sustained reductions in gas prices, slowing inflation, stabilizing mortgage interest rates and a recovering stock market — and these developments may yet be reflected in stronger housing data to come.”
July’s unsold inventory represented a 3.3-month supply at the current sales pace, up from 2.9 months in June and 2.6 months last year.
Properties typically remained on the market for 14 days in July, the same as in June and down from 17 days in July 2021. Eighty-two percent of homes sold in July were on the market for less than a month.
“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.”
By property type, single-family home sales in July slid to a seasonally adjusted annual rate of 4.31 million, down 5.5% from 4.56 million in the previous month and down 19% from a year earlier. The median existing single-family home price was $410,600, up 10.6% on a year-over-year basis.
Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 500,000 units in July, down 9.1% from June and 29.6% compared to July 2021. The median existing condo price rose 9.9% year over year to $345,000.
In July, first-time buyers were responsible for 29% of sales, down from 30% in both June 2022 and June 2021, while individual investors or second-home buyers, who make up many cash sales, purchased 14% of homes, down from 16% in June and 15% in July 2021.