According to the National Association of Realtors (NAR), existing-home sales fell by 1.7% in June month-over-month, to a seasonally adjusted annual rate of 5.27 million. Additionally, half of the major U.S. regions recorded minor sales jumps while the other half experienced greater declines.
“Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” said Lawrence Yun, NAR’s chief economist.
According to Yun, the nation is in the midst of a housing shortage and much more inventory is needed. “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” he said.
Yun also states that other factors may be contributing to low sales.
“Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure,” said Yun. “It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive.”
Housing inventory ticked up slightly month-over-month in June, but is unchanged from the level of one year ago.
By region, existing-home sales rose slightly in the Northeast and Midwest but decreased in the South and West, but sales were still lower than a year ago across all regions. Median home prices rose in all regions, with the highest gains in the Midwest and South.
While existing home sales fell, the Census Bureau reports that sales of new single‐family houses increased by 7% in June month-over-month, and increased by 4.5% year-over-year.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.80% in June, down from 4.07% in May. The average commitment rate across all of 2018 was 4.54%.
“Historically, these rates are incredibly attractive,” said NAR President John Smaby. “Securing and locking in on a mortgage now – given the current, favorable conditions – is a decision that will pay off for years to come.”