U.S. Existing Home Sales Slide by 5.9% in July
2022.08.18 17:54
By Scott Kanowsky
Investing.com — Sales of previously owned homes in the United States fell by 5.9% in July against the prior month, as more buyers shied away from increasing mortgage rates and soaring prices.
According to data from the National Association of Realtors, total existing home sales sagged for the sixth straight month to a seasonally adjusted annual rate of 4.81M, down from 5.11M in June. Economists had predicted the figure to come in at 4.89M.
Sales were down by 20.2% compared to the same period last year, with all four major U.S. regions recording monthly declines.
The supply of homes also remained squeezed, with total housing inventory rising by 4.8% month-on-month to 1.31M units at the end of July. At the current sales pace, unsold inventory sits at a supply of 3.3 months.
“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said NAR Chief Economist Lawrence Yun.
The average rate of a 30-year fixed loan mortgage has since retreated to around 5.4%, according to Mortgage News Daily. Yun said this may give an additional boost to home buyers’ purchasing power in the near term.
However, given that the rate was at just over 2.5% this time last year, purchasers still face relatively elevated mortgage costs.
Meanwhile, the median existing home price for all housing types in June was $403,800 – a surge of 10.8% against July 2021. Prices have now risen year-on-year for 125 consecutive months, the longest-running streak on record.
“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun said.
“However, it’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
