June Existing-Home Sales Retreat, Median Price Sets Record: NAR

June sales fell 5.4% from May to a seasonally adjusted annual rate of 5.12 million units. Total registered sales were down by 14.2% from 5.97 million a year ago.

“Falling housing affordability continues to take a toll on potential home buyers,” NAR chief economist Lawrence Yun said. “Both mortgage rates and home prices have risen too sharply in a short span of time.”

The median existing-home price jumped 13.4% from June 2021 to $416,000. All regions posted increased pricing last month, marking the 124th straight month of year-over-year gains, and the longest-running streak on record.

“Finally, there are more homes on the market,” Yun said. “Interestingly, though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

Total housing inventory at the end of June rose 9.6% from May to 1.26 million units and was up 2.4% from one year ago. Inventory is at a 3.0-month supply at the current sales pace. That’s up from 2.6 months in May and up from 2.5 months YoY. Properties averaged 14 days on the market in June. That’s two days less than May’s total, and down from 17 days versus the same period a year ago.

NAR reports that 88% of homes sold in June were on the market for less than a month. First-time buyers accounted for 30% of sales last month, down from 27% in May and down from 31% a year ago.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.52% in June, up from 5.23% in the month prior. The average commitment rate across all of 2021 was 2.96%.

“If consumer price inflation continues to rise, then mortgage rates will move higher,” Yun added. “Rates will stabilize only when signs of peak inflation appear. If inflation is contained, then mortgage rates may even decline somewhat.”

Regionally, existing-home sales in the Northeast were unchanged in June at an annual rate of 670,000, falling 11.8% YoY from June 2021. The median price in the Northeast was $453,300, a 10.1% increase from one year ago.

In the Midwest, sales were down 1.6% MoM to an annual rate of 1,230,000 in June. They were down 9.6% YoY. The median price in the Midwest was $306,900, up 10.2% from one year before.

In the South, sales retreated 6.2% MoM to an annual rate of 2,260,000 and were down 14.1% YoY. The median price was $374,900, a 16.8% jump from one year ago. For the tenth consecutive month, the South recorded the highest pace of price appreciation versus the other three regions.

Existing-home sales in the West shrank 11.1% MoM to an annual rate of 960,000 in June. They were also down 21.3% YoY. The median price in the West was $624,000, an increase of 9.6% YoY.

By David Schollaert, David@SteelMarketUpdate.com