According to a new study from the National Association of Realtors (NAR), existing-home sales receded slightly in July as many homeowners continued to hang onto their current mortgage rates.
Among the four major U.S. regions, sales grew in the West but faded in the Northeast, Midwest, and South, while all four regions registered year-over-year sales declines.
Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums, and co-ops—decreased 2.2% from June to a seasonally adjusted annual rate of 4.07 million in July. Year-over-year, sales dropped 16.6% (down from 4.88 million in July 2022).
"Two factors are driving current sales activity: inventory availability and mortgage rates," said NAR Chief Economist Lawrence Yun. "Unfortunately, both have been unfavorable to buyers."
Total housing inventory registered at the end of July was 1.11 million units, up 3.7% from June but down 14.6% from one year ago at 1.3 million. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022.
The report also found that the median existing-home price for all housing types in July was $406,700, an increase of 1.9% from July 2022 ($399,000). Prices rose in the Northeast, Midwest, and South but were unchanged in the West.
REALTORS Confidence Index:
According to the REALTORS Confidence Index, properties typically remained on the market for 20 days in July, up from 18 days in June and 14 days in July 2022. Some 74% of homes sold in July were on the market for less than a month.
First-time buyers were responsible for 30% of sales in July, up from 27% in June and 29% in July 2022. NAR’s 2022 Profile of Home Buyers and Sellers, released in November 2022, found that the annual share of first-time homebuyers was 26%, the lowest since NAR began tracking the data.
Additional Key Findings:
- All-cash sales accounted for 26% of transactions in July, identical to June but up from 24% in July 2022.
- Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in July, down from 18% in June but up from 14% one year ago.
- Distressed sales—foreclosures and short sales—represented 1% of sales in July, virtually unchanged from last month and the previous year.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 7.09% as of August 17, up from 6.96% the prior week and 5.13% one year ago.
“Retreating mortgage rates will bring more buyers and sellers to the market and get Americans moving again,” said Yun.
Single-family home sales slid to a seasonally adjusted annual rate of 3.65 million in July, down 1.9% from 3.72 million in June and 16.3% from the previous year. The median existing single-family home price was $412,300 in July, up 1.6% from July 2022.
Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 420,000 units in July, down 4.5% from June and 19.2% from one year ago. The median existing condo price was $357,600 in July, up 4.5% from the previous year ($342,200).
- Existing-home sales in the Northeast fell 5.9% from June to an annual rate of 480,000 in July, down 23.8% from July 2022. The median price in the Northeast was $467,500, up 5.5% from one year ago.
- In the Midwest, existing-home sales decreased by 3.0% from the prior month to an annual rate of 960,000 in July, dropping 20.0% from the previous year. The median price in the Midwest was $304,600, up 3.9% from July 2022.
- Existing-home sales in the South retracted 2.6% from June to an annual rate of 1.86 million in July, a decrease of 14.3% from one year ago. The median price in the South was $366,200, up 1.7% from July 2022.
- In the West, existing-home sales increased 2.7% from the previous month to an annual rate of 770,000 in July, down 12.5% from the prior year. The median price in the West was $610,500, unchanged from July 2022.
“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” said Yun. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”
To read the full report, including more data, charts, and methodology, click here.