Housing: June home sales dip to slowest pace since 2009
It’s getting harder to snag a home.
Sales of previously owned homes dropped 3.3% in June from the month before to an annualized rate of 4.16 million, the National Association of Realtors said Thursday morning. June home sales were 18.9% lower compared with last year. That is the slowest sales pace for June since 2009 — and lower than the 4.3 million unit sales predicted by economists polled by Bloomberg.
The share of homes available for sale shrunk to a historic low leaving potential buyers with fewer options. First-time buyers are also waiting longer to buy. They were responsible for 27% of sales in June, down from 28% in May and 30% in June 2022, the latest data shows.
“The first half of the year was a downer for sure with sales lower by 23%,” said NAR Chief Economist Lawrence Yun. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”
The number of homes for sale at the end of June clocked in at 1.08 million units, identical to May but down 13.6% from a year ago, the NAR reported.
That corresponds with other housing data that shows prices are getting a bump due to the tug-of-war between supply and demand. Redfin’s Homebuyer Demand Index, which measures early-stage demand by tracking requests for tours and other buying services from Redfin agents, is up 2% from a year ago. But pending home sales are down 15%.
“Condos, townhouses and new construction homes are selling quickly, partly because they don’t require much work and people can’t afford to fix up a home when they have such high monthly mortgage payments,” Jordan Hammond, Redfin Premier agent for Raleigh, North Carolina, wrote in a statement.
One big problem: Rate-sensitive homeowners remain on the sidelines when it comes to listing their properties. New listings are down 25% as homeowners are reluctant to give up their low mortgage rates, Redfin found. In total, the number of homes for sale is down 16%, the biggest dip in a year and a half, and inventory also posted an unseasonal monthly decline.
“After over a year of high rates, buyers are getting used to lowering their budgets, searching for smaller homes, and thinking outside the box to reduce their monthly payments, doing things like rate buydowns or large down payments,” Hammond said.
The shortage of homes has kept competition among buyers fierce, and some agents are seeing bidding wars in several pockets of the market. “There are simply not enough homes for sale,” Yun added. “The market can easily absorb a doubling of inventory.”
Meanwhile, inventory sat on the market for 18 days in June, identical to May but up from 14 days in June 2022, according to the NAR.
This comes as mortgage rates have been a headwind to buyers. Higher rates have hindered affordability and sidelined many potential homeowners.
And there hasn’t been relief in sight as mortgage rates climbed close to 7%, according to Freddie Mac. Last week, the 30-year fixed mortgage came in at 6.96%, up from 6.81% the week prior. This week's rate comes out at noon on Thursday.
Meanwhile, prices for previously owned homes haven't cooled. The median price reached $410,200 — the second-highest price ever recorded since January 1999, when NAR began tracking the data, and only 0.9% less than the all-time high of $413,800 from one year ago.
It has been the third time that the monthly median sales price clipped at $400,000, similar to May and June’s 2022 levels.
Regionally, sales in the Northeast grew 2.0% from May’s annual rate of 510,000 in June, down 21.5% from June 2022. The median price in the Northeast was $475,300, up 4.9% from the prior year.
In the Midwest, home sales were unchanged from one month ago at an annual rate of 990,000 in June, slumping 19.5% from one year ago. The median price in the Midwest was $311,800, up 2.1% from June 2022.
Sales in the South dropped 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price in the South was $366,600, down 1.2% from June 2022.
And in the West, home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price in the West was $606,500, down 3.4% from June 2022.
Separately, individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year. This differs from the all-cash sales, which accounted for 26% of transactions in June, up from 25% in both May 2023 and June 2022.
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
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