Sales of previously owned homes fell 5.4% in June compared to May, totaling 3.89 million units on a seasonally adjusted, annualized basis, according to the National Association of Realtors. This also marks a 5.4% decline from June of last year, representing the slowest sales pace since December.
These figures are based on closed sales from contracts signed mainly in April and May, during which the average rate for a 30-year fixed mortgage exceeded 7%. Although rates have slightly retreated to the high 6% range, the impact on the market remains significant.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” noted Lawrence Yun, chief economist for the Realtors. “Homes are staying on the market longer, sellers are receiving fewer offers, and more buyers are insisting on home inspections and appraisals. Nationally, inventory is definitively rising.”
Inventory levels surged 23.4% from a year ago to 1.32 million units by the end of June, coming off record lows but still just a 4.1-month supply. A balanced market typically has a six-month supply. These levels are the highest since May 2020, driven by homes lingering on the market longer. The average time a home stayed on the market increased to 22 days, up from 18 days a year ago.
Despite the rise in inventory, home prices continue to climb. The median price of an existing home sold in June reached $426,900, a 4.1% increase year over year and a record high for the second consecutive month. This increase is partly due to the stronger performance of the higher-end market.
Sales of homes priced over $1 million were the only category to see gains compared to last year, while the biggest decline was in homes priced at $250,000 or lower. The supply of lower-priced homes remains the weakest but is now seeing a significant surge. Despite the high national sales price, new listing prices are lower.
“The median listing price is being held down by an influx of smaller and lower-priced listings. In fact, the number of for-sale homes in the $200,000 to $350,000 range surged by 50% compared to a year ago,” stated Danielle Hale, chief economist for Realtor.com.
Higher-end buyers, who typically use more cash, accounted for 28% of sales, up from 26% a year ago. Meanwhile, investors, who made up 16% of sales, have slightly reduced their activity from 18% last year.
“Assuming inventory continues to increase, we could see either a rise in home sales or, if prices do not rise, a stabilization or decrease in prices,” Yun added.
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