WASHINGTON–Sales of existing homes in the U.S. hit a six month-low in July, with analysts saying a big reason is homebuyers who have cheap mortgages aren’t shopping around given prevailing mortgage rates.
Moreover, a lack of inventory has also helped to keep prices high, pushing up prices higher on a year-over-year basis for the first time since January, according to data from the National Association of Realtors (NAR).
Meanwhile, data released on Wednesday by the U.S. Census Bureau and the Department of Housing and Urban Development, show shows sales of new single‐family houses in July were at a seasonally adjusted annual rate of 714,000, which represents a 4.4% increase above the revised June rate of 684,000 and is 31.5% above the July 2022 estimate of 543,000.
The same data show the median sales price of new houses sold in July 2023 was $436,700. The average sales price was $513,000.
For Sale Inventory and Months’ Supply
The seasonally adjusted estimate of new houses for sale at the end of July was 437,000. This represents a supply of 7.3 months at the current sales rate.
According to data from the National Association of Realtors, existing home sales fell 2.2% in July to a seasonally adjusted annual rate of 4.07 million units, the lowest level since January, from an unrevised 4.16 million units in June.
Sales fell in the Northeast, Midwest and South, but rose in the West, where home prices have fallen most sharply in the past year, the NAR reported. All regions experienced annual sales declines.
Home resales, which represent a significant piece of U.S. housing sales, fell 16.6% on a year-on-year basis in July.
As CUToday.info has been reporting, mortgage rates have surged to the highest levels in decades, with the average rate on the traditional 30-year fixed-rate mortgage topping 7% in the latest week, according to Freddie Mac.
The Present & The Forecast
The NAR data show there were 1.11 million previously owned homes on the market in July, up 3.7% from a month earlier but down 14.6% from July 2022. The association noted that given July's sales pace, it would take 3.3 months to exhaust the current inventory of existing homes, up from 3.2 months a year ago.
The NAR is forecasting that total resales in 2023 will fall 12.9% from 2022, at the same time that total new home sales in 2023 will increase by 12.3%.