Existing-home sales in the US plunged to one of the lowest levels seen since 2010 last month, as would-be sellers held out for better mortgage rates and buyers flinched at sky-high prices.
Sales of previously owned homes fell 5.4 percent from May, dropping to an annualized rate of 3.89 million, according to data released Tuesday by the National Association of Realtors (NAR). This marks the fourth consecutive monthly decline.
Economists had forecast an annualized rate of around four million sales. This was lower than even the most pessimistic forecasts.
The slowdown comes amid surging prices, with the median sales price hitting a new record of $426,900 in June, up 4.1 percent. Prices are climbing even though more homes have entered the market recently, though inventory remains historically low.
In June, there were 1.32 million homes for sale – the highest since October 2020 but still far below the 1.9 million listed before the pandemic in June 2019. At the current sales rate, it would take 4.1 months to sell all available homes, the longest duration in four years.
There may be some good news for would-be buyers, as the NAR thinks prices are unlikely to keep climbing as rapidly going forward due to the increase in supply.
“Even as the median home price reached a new record high, further large accelerations are unlikely,” NAR chief economist Lawrence said. “Supply and demand dynamics are nearing a balanced market condition. The months supply of inventory reached its highest level in more than four years.”
All four major U.S. regions posted sales declines on a month-to-month basis. Year-over-year, sales fell in the Northeast, Midwest, and South but were unchanged in the West.
“We’re seeing a slow shift from a seller’s market to a buyer’s market,” Yun added.
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