U.S. Home Sales Drop for Sixth Straight Month as Housing Recession Rolls On

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Sales of existing homes in the United States fell by more than expected in July as high borrowing costs, fading demand, and tight inventories weighed down the housing market.

Sales of previously owned homes fell to a seasonally adjusted annual rate of 4.81 million, a 5.9 percent decline from the prior month, the National Association of Realtors said Thursday. The June figure was revised down to a 5.11 million rate from 5.12 million.

Compared with a year ago, sales are down 20.2 percent.

“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said NAR Chief Economist Lawrence Yun. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers.”

This was the slowest pace of sales since May of 2020, when much of the economy was shuttered and concerns over infection were extremely high. Excluding the pandemic-related decline, this was the slowest pace of sales since November 2015.

Sales have now declined for six straight months, the longest streak of declines since 2014.

The inventory of unsold existing homes rose to 1.31 million, or the equivalent of 3.3 months at the current monthly sales pace. That is considered a tight supply.

The median existing-home price was $403,800, up 10.8 percent from July 202 as prices increased in all regions. This marks 125 consecutive months of year-over-year increases, the longest-running streak on record. The pace of home price increases, however, has slowed. The median price declined in July from the previous month’s record 413,800 but the median sales price typically falls in the July.

“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun added. “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.”

Houses typically remained on the market for 14 days in July, the same as in June and down from 17 days in July 2021. Fourteen days is the lowest average time on the market since the NAR began tracking it in 2011.

Single-family home sales declined to a seasonally adjusted annual rate of 4.31 million in July, a 5.5 percent decline from June. Compared with a year ago, sales of single family homes are down 19 percent. The median existing single-family home price was $410,600 in July, up 10.6 percent from a year earlier but below June’s $423,300.


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