Home Sales Fall in June as Listings Dwindle

The numbers: A persistent lack of homes for sale combined with strong home-buying demand pushed home prices up in June to the highest level in a year.

The total number of homes for sale in June fell by 13.6% from last June, to 1.08 million units. Housing inventory, particularly of single-family homes, is at the lowest level for the month of June on record at 960,000 units.

Sales of previously owned homes fell by 3.3% to an annual rate of 4.16 million in June, the National Association of Realtors said Thursday.

That’s the number of homes that would be sold over an entire year if sales took place at the same rate every month as it did in June. The numbers are seasonally adjusted.

Homes were sold at the slowest pace in six months since January 2023.

Additionally, the 4.16 million number is also the slowest rate of homes sold for the month of June since 2009, during the sub-prime lending crisis.

The drop in sales fell short of what economists on Wall Street had expected. They forecast existing-home sales to total 4.2 million in June.

Compared to June 2022, home sales are down by 18.9%.

Key details: The median price for an existing home in June was $410,200, which is the second-highest price that the NAR has recorded since it began tracking the data in 1999.

Home prices peaked in June last year, when the median price of a resale home hit $413,800.

The number of homes on the market remained flat in June at 1.08 million units. Out of that number, 960,000 single-family homes were on the market. That is the lowest level for the month of June since the NAR began tracking the data in 1982.

Homes listed for sale remained on the market for 18 days on average, unchanged from the previous month. Last June, homes were only on the market for 14 days.

Sales of existing homes across the country were mixed—the Northeast saw home sales climb in June by 2%, but the rest of the country saw flat or even drops in the number of homes being sold.

All-cash buyers made up 26% of sales. The share of individual investors or second-home buyers was 18%. About 27% of homes were sold to first-time home buyers.

Big picture: The housing market has recovered, but with inventory at record lows, the big question is whether it is sustainable.

Home sellers continued to hold out on selling their homes amid mortgage rates that hovered near 7%.

Builders were responding to the lack of inventory by ramping up home-building, but new housing units may not be enough to address the shortage of homes for sale.

Home prices were also at near-record highs, as the NAR noted, which coupled with high rates, makes homeownership unaffordable for many Americans.

What the realtors said: “It is a tough market to be a buyer in the current environment,” Lawrence Yun, chief economist at the National Association of Realtors, said.

Yun added that there were “simply not enough homes for sale,” and that even if inventory doubles, the market could “easily absorb” it.

Buyers are still contending with multiple offers, Yun said, and one-third of homes are getting sold above their list price.

What are they saying? “Existing home sales fell more than expected and are likely to remain subdued until mortgage rates ease or inventories improve,” Erik Johnson, senior economist at BMO Capital Markets, wrote in a note.

“Perhaps stabilizing prices will be enough to convince more owners to put their homes on the market, but it’s likely that the fate of both existing home inventories and mortgage rates will remain linked for the foreseeable future,” he added.

Market reaction: Stocks were mixed in early trading on Thursday. The yield on the 10-year note rose above 3.8%.

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