Existing-home sales slid for the fourth straight month in July to the slowest pace in more than two years, the National Association of RealtorsÒ reported Wednesday. The West was the only region with an increase in sales last month.
Total existing-home sales decreased 0.7% to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. With last month’s decline, sales are now 1.5% below a year ago and have fallen on an annual basis for five straight months.
Lawrence Yun, NAR chief economist, says the continuous solid gains in home prices have now steadily reduced demand. “Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million,” he said. “Too many would-be buyers are either being priced out or are deciding to postpone their search until more homes in their price range come onto the market.”
July existing-home sales in the Northeast dropped 8.3% to an annual rate of 660,000, and are 1.5% below a year ago. The median price in the Northeast was $309,700, which is up 6.8% from July 2017.
In the Midwest, existing-home sales declined 1.6% to an annual rate of 1.25 million in July, and are 0.8% below a year ago. The median price in the Midwest was $210,500, up 2.5% from a year ago.
Existing-home sales in the South decreased 0.4% to an annual rate of 2.24 million in July, and are 0.4% lower than a year ago. The median price in the South was $233,400, up 2.7% from a year ago.
Existing-home sales in the West rose 4.4% to an annual rate of 1.19 million in July, but are still 4.0% below a year ago. The median price in the West was $392,700, up 5.1% from July 2017.
The median existing-home price for all housing types in July was $269,600, up 4.5% from July 2017 ($258,100). July’s price increase marks the 77th straight month of year-over-year gains.
Total housing inventory at the end of July decreased 0.5% to 1.92 million existing homes available for sale (unchanged from a year ago). Unsold inventory is at a 4.3-month supply at the current sales pace (also unchanged from a year ago).
Properties typically stayed on the market for 27 days in July, up from 26 days in June but down from 30 days a year ago. 55% of homes sold in July were on the market for less than a month.
“Listings continue to go under contract in under month, which highlights the feedback from Realtors® that buyers are swiftly snatching up moderately-priced properties,” said Yun. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
“In addition to the steady climb in home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” said Yun. “This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”
First-time buyers were 32% of sales in July, which is up from 31% last month but down from 33% year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34%.
“Despite first-time buyers struggling to achieve homeownership, Realtors® in most areas say demand is still the strongest at the entry-level segment of the market,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “For prospective first-timers looking to begin their home search this fall, it is expected that competition will remain swift.”
All-cash sales were 20% of transactions in July, down from 22% in June but up from 19% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in July (unchanged from last month and a year ago).
Distressed sales – foreclosures and short sales – were 3% of sales in July (lowest since NAR began tracking in October 2008), unchanged from last month and down from 5% a year ago. 2% of July sales were foreclosures and 1% were short sales.
Single-family home sales declined 0.2% to a seasonally adjusted annual rate of 4.75 million in July from 4.76 million in June, and are 1.2% below the 4.81 million sales pace a year ago. The median existing single-family home price was $272,300 in July, up 4.6% from July 2017.
Existing condominium and co-op sales fell 4.8% to a seasonally adjusted annual rate of 590,000 units in July and are 3.3% below a year ago. The median existing condo price was $248,100 in July, which is 3.2% above a year ago.