In front of a home for sale on July 14, 2022 in San Francisco, California.
Justin Sullivan | beautiful pictures
According to a monthly report by the National Association of Realtors, sales of previously owned homes in June fell 5.4% compared to May as record prices and exchange rates fell. increase.
Sales fell to a seasonally adjusted annualized rate of 5.12 million units last month, the group said. Sales were 14.2% lower than in June 2021.
This is the slowest sales pace since the same month of 2020, when sales fell so rapidly at the start of the pandemic. Additionally, this is the slowest pace since January 2019 and lower than the 2019 annual total, pre-pandemic.
These numbers are based on home closures, so contracts could have been signed in April and May, before the average 30-year fixed mortgage rate rose above 6% and inflation is rising to levels not seen since the early 1980s.
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“That’s clearly because affordability is declining,” said Lawrence Yun, chief economist at Realtors. “We’ve never seen mortgage rates rise this fast. Even people who want to buy, they’re being priced in.”
There were 1.26 million homes sold at the end of June. That was a 2.4% increase from the previous June and the first year-over-year increase in three years. At current sales rates, inventory is now at a three-month supply. That level is still considered low, but is improving. Supply is increasing both as more sellers are trying to capitalize on perhaps the last red-pandemic housing boom and because homes are now on the market for longer.
However, supply remains tight, keeping the heat below house prices. The median price of an existing home sold in June set another record at $416,000, up 13.4 percent year-on-year.
Activity continued to be stronger in the higher-end segment, where there was more supply. For example, sales of homes priced between $100,000 and $250,000 were 31% lower year-over-year, while sales of homes priced between $750,000 and $1 million were up 6%. Home sales over $1 million increased 2%. The upper class seems to be waning, as the annual comparisons in recent months have been much higher.
While sales are falling, the market is still growing rapidly. The average time a home spends on the market is 14 days, a record low.
“This is a remarkable number because sales are slower,” said Yun. “People are trying to take advantage of their rate lock-in. That might explain why the days in the market are moving so quickly.”
Sales are likely to fall further in the coming months, as many recent indicators show much weaker buyer demand. Mortgage application fell to a 22-year low last week, with demand from homebuyers down 19% from the same week a year ago, according to the Mortgage Bankers Association.
“Based on trends at this stage in the business and housing cycles, I would expect affordability to be a larger driver than availability,” said Danielle Hale, chief economist at Realtor.com. have in the future”. “We now see that affordable regions in the Northeast and Midwest top Realtor.com’s hottest June housing market, as homebuyers continue to take advantage of workplace flexibility work to find ways to reduce their housing costs.”