Existing-home sales drop while home prices break new records
Home prices rose for the fifth consecutive month, reaching an all-time high in June, according to a report released by the National Association of Realtors® (NAR). Those higher prices led to a drop in total existing-home sales, with numbers coming 5.4% lower than May to a seasonally adjusted annual rate of 3.89 million. All four regions saw a drop in existing-home sales as well. Coincidentally, existing-home sales dropped 5.4% from June 2023.
“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.”
Regionally, the story was similar to the national one, with sales coming down month-over-month and year-over-year except in the West.
- Northeast: down 2.1%, an annual rate of 470,000, down 6.0% from June 2023
- Midwest: down 8.0%, an annual rate of 920,000, down 6.1% from June 2023
- South: down 5.9%, an annual rate of 1,760,000, down 6.9% from June 2023
- West: down 2.6%, an annual rate of 740,000, identical to June 2023
Inventory and prices up
There’s encouraging news about the number of homes for sale, also called unsold inventory, in June. Unsold inventory sits at a 4.1-month supply at the current sales pace. The last time unsold inventory posted above a four-month supply was right at the beginning of the pandemic—May 2020 (4.5 months).
Inventory came in at 1.32 million units, up 3.1% from May and 23.4% from one year ago (1.07 million). That’s good news for buyers, particularly first-time homebuyers, as more options means more chance of finding the right home for you and less upward pressure on prices.
Speaking of prices, this increase of inventory for sale has not had a cooling effect on home prices. This month’s median existing-home sale price was the highest recorded by the NAR, topping $426,000. All four regions saw prices go up.
“Even as the median home price reached a new record high, further large accelerations are unlikely,” Yun noted. “Supply and demand dynamics are nearing a balanced market condition. The month’s supply of inventory reached its highest level in more than four years.”
Here’s how this month’s data compares to the last 12 months of home price trends:
Month | Median existing-home price | Month-over-month | Year-over-year |
$410,200 | Up 3.6% | Down 0.9% | |
$406,700 | Down 0.9% | Up 1.9% | |
$407,100 | Up 0.1% | Up 3.9% | |
$394,300 | Down 3.1% | Up 2.8% | |
$391,800 | Down 0.6% | Up 3.4% | |
$387,600 | Down 1.1% | Up 4.0% | |
$382,600 | Down 1.3% | Up 4.4% | |
$379,100 | Down 0.9% | Up 5.1% | |
$384,500 | Up 1.4% | Up 5.7% | |
$393,500 | Up 2.3% | Up 4.8% | |
$407,600 | Up 3.6% | Up 5.7% | |
$419,300 | Up 2.9% | Up 5.8% | |
June | $426,900 | Up 1.8% | Up 4.1% |
Who’s doing the buying?
First-time homebuyers were responsible for 29% of sales in June, down from 31% in May and up from 27% in June 2023. All-cash sales made up 28% of transactions in June, a trend that has held steady for a few months.
Could today’s news mean that it’s a good market for homebuyers? Possibly. The inventory news is welcome and could help cool home prices. Mortgage rates have been trending down over the last few weeks as well. But if it becomes a buyers’ market, it’s possible that many buyers will start looking to buy a home. If that happens, Same Day Mortgage can help you compete, especially against deep-pocketed buyers who may purchase with cash.
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