Five Months of Existing-Home Sales Declines

For the fifth consecutive month, existing-home sales dropped as three of the four major geographic regions of the country experienced month-over-month declines. On a yearly basis, sales sank in all four regions. 

All-in-all, total existing home sales for June 2022—which includes single-family homes, townhomes, condominiums, and co-ops—sank 5.4% from May 2022 to a seasonally adjusted annual rate of 5.12 million units in June. Year-over-year, sales fell at a more drastic rate of 14.2% as total transactions in June 2021 reached 5.97 million units. 

This information comes to us from the National Association of Realtors (NAR) Existing-Home Sales Report, which is published on a monthly basis. 

"Falling housing affordability continues to take a toll on potential home buyers," said Lawrence Yun NAR’s Chief Economist. "Both mortgage rates and home prices have risen too sharply in a short span of time." 

In terms of good news from the report, total housing inventory at the end of June was 1.26 million units, a 9.6% increase from May and a 2.4% yearly increase from June 2021. The NAR estimates that the current available inventory could supply the market for three months, a number that is also up from 2.6 months from last month and 2.5 months from the same period last year. 

Even as inventory increases, the average home is now on the market for a record-low of 14 days. This number is down from 16 days in May and 17 days a year ago and is the lowest number on record since the NAR began tracking the data point in May 2011. Additionally, 88% of homes sold in June 2022 were on the market for less than a month. 

The NAR also found that the median existing-home price for all dwellings in June averaged $416,000. This marks the 124th consecutive month of year-over-year increases, the longest running streak on record. 

"Finally, there are more homes on the market," Yun added. "Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers." 

Other key data found by the report includes:  

• First-time buyers were responsible for 30% of sales in June, up from 27% in May and down from 31% in June 2021. NAR's 2021 Profile of Home Buyers and Sellers—released in late 2021-reported that the annual share of first-time buyers was 34%. 
• All-cash sales accounted for 25% of transactions in June, the same share as in May and up from 23% in June 2021. 
• Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in June, unchanged from May and a slight increase from 14% in June 2021. 
• Distressed sales—foreclosures and short sales—represented less than 1% of sales in June, essentially unchanged from May 2022 and June 2021. 
• According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.52% in June, up from 5.23% in May. The average commitment rate across all of 2021 was 2.96%. 
• Single-family home sales declined to a seasonally adjusted annual rate of 4.57 million in June, down 4.8% from 4.80 million in May and down 12.8% from one year ago. The median existing single-family home price was $423,300 in June, up 13.3% from June 2021. 
• Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 550,000 units in June, down 9.8% from May and down 24.7% from one year ago. The median existing condo price was $354,900 in June, an annual increase of 11.5%. 
• At an annual rate of 670,000 in June, existing-home sales in the Northeast were unchanged from May and down 11.8% from June 2021. The median price in the Northeast was $453,300, a 10.1% jump from one year ago. 
• Existing-home sales in the Midwest slid 1.6% from the previous month to an annual rate of 1,230,000 in June, retreating 9.6% from June 2021. The median price in the Midwest was $306,900, a 10.2% increase from one year before. 
• Existing-home sales in the South slipped 6.2% in June to an annual rate of 2,260,000, down 14.1% from the previous year. The median price in the South was $374,900, a 16.8% bounce from one year ago. For the 10th consecutive month, the South recorded the highest pace of price appreciation in comparison to the other three regions. 
• Existing-home sales in the West decreased 11.1% compared to the month before to an annual rate of 960,000 in June, down 21.3% from this time last year. The median price in the West was $624,000, an increase of 9.6% from June 2021.