Prices rise to a record high, potentially placing many first-time buyers out of the market
WASHINGTON — June existing home sales fell 5.4% compared with June 2023, while sales prices rose to a record high, likely placing some buyers out of the market at a time when interest rates remain high.
This dynamic continues to impact furniture sales, as buyers of existing homes and new construction typically spur the need for new furniture. Thus, as many people are not moving, they are delaying buying some home furnishings.
According to figures release by the National Association of Realtors this past Tuesday, existing home sales totaled 3.89 million in June, down from 4.11 million in June 2023, a 5.4% drop. Sales also fell 5.4% from May.
The NAR also said that the median sales price rose to the highest recorded for the second consecutive month, to $426,900, up from $410,100 in June 2023, a 4.1% increase. It was also the 12th consecutive month of year-over-year gains.
The figures include the sales of single-family homes, town homes and condominiums, with year-over-year sales falling in the Northeast, Midwest and the South and remaining unchanged in the West. All four regions posted declines from May and all four U.S. regions posted price increases.
Single-family home sales totaled 3.52 million in June, down 4.3% from last June and down 5.1% from May. The median existing single-family home price was $432,700 in June, up 4.1% from June 2023.
Sales of condominiums and town homes totaled 370,000 units, down 14% from last June and down 7.5% from May. The median sales price for condominiums was $371,700, up 2.6% from June 2023.
There were 1.32 million homes on the market at the end of June, up 23.4% from the 1.07 million reported in June 2023 and up 3.1% from May, the NAR said. The unsold inventory represents a 4.1-month supply based on the current rate of sales, compared to 3.1 months in June 2023 and 3.7 months in May.
Lawrence Yun, chief economist at the NAR, said that the supply of inventory reached its highest level in more than four years.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” Yun said. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitely rising on a national basis.”
However, he added, “Even as the median home price reached a new record high, further large accelerations are unlikely. Supply and demand dynamics are nearing a balanced market condition.”
By region, activity was as follows:
+ In the Northeast, existing home sales were down 6% from June 2023 and also down 2.1% from May to an annual rate of 470,000. The median sales price was $521,500, up 9.7% from June 2023.
+ In the Midwest, existing home sales totaled 920,000 in June, down 6.1% from June last year and down 8% from May. The median sales price in the region was up 5.5% from June 2023 to $327,100.
+ In the South, sales totaled 1.76 million in June, down 6.9% from June 2023 and down 5.9% from May. The median sales price was $373,000, up 1.7% from June last year.
+ In the West, existing home sales totaled 740,000, unchanged from June 2023 and down 2.6% from May. The median sales price in the region was $629,800, up 3.5% from June 2023.
Other highlights of the report are as follows:
+ The 30-year fixed rate mortgage averaged 6.77% as of July 18, according to Freddie Mac, down from 6.78% in June 2023 and down from 6.89% a week prior.
+ Properties typically remained on the market for 22 days in June, up from 18 days in June 2023 but down from 24 days in May
+ First-time buyers were responsible for 29% of sales in June, up from 27% in June 2023 but down from 31 days in May. This compares to a 32% annual share of buyers reported in the NAR’s 2023 Profile of Home Buyers and Sellers report issued this past November.
+ All cash sales represented 29% of transactions in June, up 26% from June 2023 but unchanged from May. Individual investors and second-home buyers that make up many of these sales purchased 16% of existing homes in June, down 18% from June 2023 and unchanged from May.
+ Distressed sales which include foreclosures and short sales, represented 2% of sales in June, unchanged from last year and last month.