US real estate isn’t exactly slow, but it’s a big change from last year’s market. National Association of Realtors (NAR) existing-home data shows sales fell again in June. It was the fifth consecutive month to see a drop, while inventory continued to rise. The market is still tight, but showing its first sign of weakness — home prices in the West have begun to fall.
US Existing-Home Sales Fell For A Fifth Consecutive Month, Down 14%
US existing-home sales slipped again last month. The seasonally adjusted annual rate (SAAR) of homes fell to 5.12 million in June, down 5.4% from a month before and 14.2% lower than last year. Higher mortgage rates have been cutting into qualified demand and reducing the volume of buyers significantly. Last month was the fifth consecutive month to record falling demand.
US Existing-Home Inventory Climbed In June
The silver lining on falling demand is inventory pressures are beginning to release and more people are selling. Inventory climbed to 1.26 million homes in June, up 9.6% from a month before and 2.4% higher than last year. While the climb is only slight from last year, having demand fall while inventory climbed reduces relative pressure.
Reduced demand relative to supply helped the total months of inventory climb to the highest level since 2020. NAR estimates 3.0 months of inventory were available in June, almost double the 1.6 month record low in January 2022. While this is the highest inventory since August 2020, it’s still fairly light compared to historical standards.
US Existing-Home Prices Are Soaring In The East, But Falling In The West
Inventory eased but wasn’t tight, resulting in home prices slowing but still generally growing. The median sale price across the US climbed to $416,000 in June, up 1.9% (+$7,600) from a month before. Compared to last year, prices are 13.0% (+$49,100) higher — a solid climb. The substantial national move was largely due to prices in the Northeast region, which are suddenly booming after missing the run.
The median sale price in the Northeast region jumped to $453,300 in June, up 5.8% (+$24,800) from a month before. That brings the price 10.1% (+$41,500) higher than last year, meaning more than half of annual gains were last month. Even so, price growth is still underrepresented compared to the national rate.
On the other end of the country, home prices in the West showed its first sign of market weakness. The median sale price fell to $624,000 in June, down 1.2% (-$7,600) from a month before. Compared to last year prices are still 9.6% (+$54,600) higher but the rate of growth still lagged the national rate. High home prices tend to be more sensitive to rising mortgage rates, so this kind of move shouldn’t be completely unexpected.
US existing-home sales are falling, inventory is rising, but prices are mixed. Pressure on supply is being released, however it’s still a relatively tight market compared to usual. The US Federal Reserve has stated the market is exuberant, meaning an emotion-driven bubble. Those tend to change quickly once prices stop growing, and FOMO dissipates.