Existing-home sales dropped 0.7 percent to a seasonally adjusted 5.34 million in July, declining for the fourth consecutive month, according to the latest data from the National Association of Realtors (NAR). Home sales also dropped 1.5 percent year-over-year, marking the fifth consecutive month of year-over-year declines.
“Led by a notable decrease in closings in the Northeast, existing-home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million,” said NAR Chief Economist Lawrence Yun in a press release. “Too many would-be buyers are either being priced out or are deciding to postpone their search until more homes in their price range come onto the market.”
The median existing-home price for all housing types hit $269,600 — up 4.5 percent from July 2017 and the 77th straight month of year-over-year gains.
“In addition to the steady climb in home prices over the past year, it’s evident that the quick run-up in mortgage rates earlier this spring has had somewhat of a cooling effect on home sales,” Yun added. “This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market.”
Total housing inventory decreased 0.5 percent month-over-month to 1.92 million existing-homes for sale, which is unchanged from a year ago. Unsold inventory is currently at a 4.3-month supply and homes typically stayed on the market 27 days in July. Of the homes that did sell, 50 percent were on the market for less than a month.
“Listings continue to go under contract in under a month, which highlights the feedback from Realtors that buyers are swiftly snatching up moderately-priced properties,” Yun concluded. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
Regionally, existing-home sales decreased 8.3 percent in the northeast, 1.6 percent in the midwest, and 0.4 percent in the south. The western region was the only area to experience gains at 4.4 percent.