Existing home sales fell 5.4% month over month in June, sinking to a seasonally adjusted annual rate of 3.89 million units, according to data from the National Association of Realtors (NAR).
That makes June the fourth straight month with a decline in resales, bringing activity to its slowest pace since December and almost matching the recent low (3.85 million) set in October. Existing home sales also slowed by the same 5.4% pace year over year.
Market observers had anticipated a drop, though June resale movement still fell short of expectations. A Reuters poll of economists had predicted the month’s annualized pace at 4 million units. June’s retreat was fueled by continued weakness in the single-family market; existing single-family sales slowed by 5.1% month over month.
Sticky, even resurgent mortgage rates and high home prices continue to keep the housing market in check, throttling buyer demand. The median existing home sales price jumped 4.1% year over year to a record $426,900 in June, marking the 12th consecutive month with a yearly price gain and the second straight month with an all-time high. Meanwhile, the 30-year fixed interest rate averaged at or above 7% throughout both April and May, sidelining a large segment of buyers determined to keep their rates below that limit.
If there has been any upside to the sales slump, it has come in the form of increasing inventory. Total housing inventory at the close of June was at 1.32 million units, up 3.1% month over month and 23.4% year over year. There’s currently a 4.1-month supply of unsold inventory at the current sales pace, up from 3.7 months in May and 3.1 months in June last year. Crossing the threshold of four-month supply is a significant milestone; the last time that happened was May 2020.
“Even as the median home price reached a new record high, further large accelerations are unlikely,” said Lawrence Yun, chief economist at the NAR. “Supply and demand dynamics are nearing a balanced market condition. The months supply of inventory reached its highest level in more than four years.”
Yun said that the market is currently amid a gradual pivot.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” he said. “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.”
