Existing-Home Sales Fall 3.3% In June

In keeping with the challenges of low inventory and high home prices, existing-home sales fell 3.3% to a seasonally adjusted annual rate of 4.16 million in June, according to the National Association of REALTORS®’ (NAR) most recent existing-home sales report.

NAR’s latest data on existing homes found that year-over-year, sales fell 18.9% (down from 5.13 million in June 2022). In addition, total housing inventory was 1.08 million units, identical to May, but down 13.6% from one year ago (1.25 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, up from three months in May and 2.9 months in June 2022.

Key data points:

• Total housing inventory was 1.08 million units, identical to May, but down 13.6% from one year ago (1.25 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, up from three months in May and 2.9 months in June 2022.
• The median existing-home price for all housing types was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022. The monthly median price surpassed $400,000 for the third time, joining June 2022 and May 2022 ($408,600).
• Properties typically remained on the market for 18 days, identical to May, but up from 14 days in June 2022. Seventy-six percent of homes sold were on the market for less than a month.
• First-time buyers were responsible for 27% of sales, down from 28% in May and 30% in June 2022. NAR’s 2022 Profile of Home Buyers and Sellers found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
• All-cash sales accounted for 26% of transactions in June, up from 25% in both May 2023 and June 2022.
• Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.
• Distressed sales—foreclosures and short sales—represented 2% of sales in June, virtually unchanged from last month and the prior year.

Single-family and condo/co-op sales:

• Single-family home sales decreased to 3.72 million, down 3.4% from 3.85 million in May and 18.8% from the previous year. The median price was $416,000, down 1.2% from last year.
• Existing condominium and co-op sales were at 440,000 units, down 2.2% from May and 20% from one year ago. The median price was $361,600, up 1.9% from the previous year ($354,800).

Regional breakdown:

• Sales in the Northeast grew 2% to an annual rate of 510,000, down 21.5% from June 2022. The median price was $475,300, up 4.9% from the prior year.
• In the Midwest, sales were unchanged at an annual rate of 990,000, down 19.5% from one year ago. The median price was $311,800, up 2.1% from last year.
• Sales in the South fell 5.4% to an annual rate of 1.91 million, down 16.2% from the previous year. The median price was $366,600, down 1.2% from last year.
• In the West, sales declined 5.1% to an annual rate of 750,000, down 22.7% from one year ago. The median price was $606,500, down 3.4% from last year.

The takeaways:

“The first half of the year was a downer for sure with sales lower by 23%. Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably,” said NAR Chief Economist Lawrence Yun.

“Home sales fell, but home prices have held firm in most parts of the country,” added Yun. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”

“Sales of existing homes dipped in June, slipping 3.3% to a pace of 4.16 million, the slowest since January,” said realtor.com® Chief Economist Danielle Hale. “As current homeowners continue to sit on the sidelines, buyers have limited new options, which is putting a damper on sales. In fact, the number of newly listed homes year-to-date trails recent years, including 2020, when pandemic-related disruptions largely delayed the home-buying season. The pace of home sales continues to exceed the four million sales low reached in January, and while it still lags year ago sales by a considerable amount, 18.9%, the gap will close in the months ahead.

“Mortgage rates in May climbed sharply after mid-month inflation data. Buyers who hustled to lock in rates are likely happy with their decision, as mortgage rates have remained relatively elevated since then. With rates still high, buyers remain cost-conscious, but a competitive market makes this challenging. The median sale price continued to decline, but the size of the drop, 0.9% from the June 2022 peak, was more modest than we’ve seen in the past three months. In fact, the U.S. median existing-home sales price of $410,200 was the second-highest price ever recorded, and only the third time in the data’s history above $400,000. Our revised 2023 outlook expects that even though conditions are favorable, home sellers will remain scarce for the rest of the year, which will keep existing-home sales roughly at their current pace.

“May’s first-ever decline in asking rents will mean some would-be first-time homebuyers continue to rent longer, and the monthly cost advantage tips further toward renting. Already, NAR found that the share of first-time home buyers dipped to just 27% in June, down from 28% in May and 30% one year ago. With individual investors or second-home buyers stepping up their pace (to 18% in June, from 15% in May), a weaker trend for rents is likely to continue,” concluded Hale.