Existing-home sales declined for the fifth consecutive month in June to a seasonally adjusted rate of 5.12 million, according to the National Association of Realtors (NAR). Existing-home sales, which includes sales of single-family homes, townhomes, condominiums, and co-ops, decreased 5.4% from May and decreased 14.2% on a year-over-year (YOY) basis in June.
“Falling housing affordability continues to take a toll on potential home buyers,” says NAR chief economist Lawrence Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.”
Total housing inventory at the end of June was 1.26 million units, an increase of 9.6% month over month and a 2.4% YOY increase compared with June 2021. Unsold inventory sits at a 3.0 month supply at the current sales pace, up from 2.6 months in May and 2.5 months in June 2021. The median existing-home price for all housing types in June was $416,000, a 13.4% YOY increase, marking the 124th consecutive month of YOY increases in prices.
Properties typically remained on the market for 14 days in June, down from 17 days in June 2021. The 14 days on the market are the fewest since NAR began tracking the statistic in May 2011. Nearly nine in 10 homes sold in June 2022 were on the market for less than a month, according to NAR.
“Finally, there are more homes on the market,” Yun says. “Interestingly though, the record-low pace of days on the market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
Freddie Mac estimates 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%.
“If consumer price inflation continues to rise, then mortgage rates will move higher,” Yun says. “Rates will stabilize only when signs of peak inflation appear. If inflation is contained, then mortgage rates may even decline somewhat.”
According to the NAR, first-time buyers were responsible for 30% of sales in June, up from 27% in May.
All-cash sales accounted for a quarter of transactions in June, unchanged from May and up from 23% in June 2021. Individual investors or second-home buyers, who make up many of the all-cash sales, purchased 16% of homes in June, again unchanged from the share reported in May.
Distressed sales—foreclosures and short sales—represented less than 1% of sales in June, unchanged from figures in both May 2022 and June 2021.
Single-family home sales declined in June to a seasonally adjusted annual rate of 4.57 million, down 4.8% from May and 12.8% from June 2021. The median existing single-family home price was $423,300 in June, a 13.3% increase from a year ago.
Existing-home sales in the Northeast were unchanged from May, but were down 11.8% compared with June 2021. Prices in the region experienced a 10.1% increase on a year-over-year basis.
Sales in the Midwest decreased on both a month-over-month and YOY basis, with the median sales price appreciating 10.2% compared with June 2021.
Existing-home sales in the South decreased 6.2% compared with May and declined 14.1% compared with the year prior. For the 10th consecutive month, the South region recorded the highest pace of YOY price appreciation (16.8%) compared with the other regions.
The West experienced a 11.1% month-over-month decline in sales in June and a 21.3% decrease on a YOY basis. The median price in the West increased 9.6% compared with June 2021.
The largest YOY median list price growth occurred in Miami (40.1%), Orlando (30.6%), and Nashville (30.6%), according to Realtor.com. Austin reported the highest increase in the share of homes that had prices reduced compared with last year (+24.7 percentage points), followed by Phoenix (+22.2 percentage points), and Las Vegas (+20.1 percentage points).
