A sign in front of a house for sale in Corte Madera, California, July 14, 2022.
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Existing home sales fell nearly 6% in July compared to June, according to the National Association of Realtors monthly report.
Sales fell to 4.81 million on a seasonally adjusted annualized basis, the group added. This is the slowest pace of sales since November 2015, other than a brief plunge early in the Covid pandemic.
Sales decreased by about 20% year-on-year.
“In terms of economic impact, we are definitely in a housing recession because builder not buildingLawrence Yun, chief economist at the National Association of Realtors, said. Absolutely not. Homeowners are still very comfortable financially. “
July sales are based on closings, so deals may have been signed in May and June. Mortgage News Daily reported that mortgage rates spiked in June and 30-year fixed loans ‘s average interest rate exceeded 6%.after that settled down to the high 5% rangeThat rate started around 3% this year, so the hit to affordability in June was particularly severe combined with sharp inflation.
Homebuyers are also struggling with supply shortages. The number of units sold at the end of July was 1.31 million units, unchanged from July 2021. At current sales pace, this equates to 3.3 months of supply.
Prices remain stubbornly high while demand is dwindling due to lower affordability. The average price of homes sold in July was $403,800, up 10.8% year-on-year. However, this is the smallest annual rise since July 2020, so price gains are now moderating.
“Median home sales prices continued to rise, but the pace has slowed for the fifth straight month, with weaker buyer demand pushing the housing market back to a more normal pace of activity,” said chief economist Daniel Hale. I have made it clear that I am,” he said. For Realtor.com. “Looking at active inventory trends, we can see that the chances of a home listing being marked down in July 2022 are almost double what it was a year ago.”
Sales activity continues to be strong at the high end of the market, but that too is fading rapidly. More supply is available at the top tier. Sales of homes priced between $100,000 and $250,000 were down 31% year-over-year, while sales of homes priced between $750,000 and $1 million were down 8%. Sales of homes priced above $1 million are down 13% from a year ago.
Only 29% of July buyers were first-time buyers. Historically, they typically account for about 40% of sales, but they’ve clearly struggled the most with affordability.
Sales are slowing, but this is still a fast-moving market. A typical house in July was contracted in just 14 days. This equals his fastest record set in June. A year ago it was the 17th. Yun called it an “abnormality.”