Home prices hit a new high even as sales fall
At $426,900, the median sale price for existing homes set another record in June, but inventory also rose, suggesting a “slow shift” to a buyer’s market.
Key points:
- The median price for existing homes has broken the record two months in a row.
- Housing inventory also continues to increase, helping the supply and demand dynamics get closer to “a balanced market condition.”
- The Midwest saw the steepest drop in home sales in June, falling 8% from the previous month, while the Northeast posted the biggest annual price gain.
Existing home sales took another big hit in June, the National Association of Realtors has reported. Sales fell 5.4% from the previous month to a seasonally adjusted annual rate of 3.89 million homes sold. Compared to a year ago, existing home sales were also down 5.4%, the latest report indicated.
However, inventory and home prices are still on the rise.
Home prices keep climbing
The median sale price for existing homes hit another all-time high, NAR reported, reaching $426,900 in June. That's 4.1% higher than one year ago, when the median price was $410,100, and up from the previous record $419,300 median sale price in May. It also marks the twelfth straight month of annual price gains.
However, despite the continual rise in home prices, the U.S. housing market may finally be leveling off, NAR Chief Economist Lawrence Yun predicts: "Even as the median home price reached a new record high, further large accelerations are unlikely," Yun said in the report.
Inventory at the highest level in 4 years
NAR also reported that existing home inventory increased 3.1% last month to 1.32 million houses by the end of June. This represents roughly 4.1 months' of supply — the highest level of inventory documented since May 2020 — and suggests that the "supply and demand dynamics are nearing a balanced market condition," Yun said.
"We're seeing a slow shift from a seller's market to a buyer's market," Yun added, while cautioning that affordability remains a major hurdle to homeownership. But there are some indications that buyers are gaining more leverage.
"Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis," Yun said.
Who's buying — and where
Sales of single-family homes fell 5.1% in June while condominium and co-op sales slid 7.5%. The downward trend is even more pronounced compared to a year ago — condo and co-op sales have fallen 14% since last June.
First-time homebuyers and investors make up a big chunk of the buyer pool, with first-timers accounting for 29% of June's existing home sales and all-cash transactions making up 28% of sales. Individual investors and second-home buyers represented 16% of June sales.
Home sales fell in all four of the regions covered in the report, with the Midwest posting the biggest monthly drop of 8%.
Between May and June, existing home sales fell 5.9% in the South, 2.6% in the West and 2.1% in the Northeast.
Compared to a year ago, the Northeast, Midwest and South all saw home sales fall 6% or more. In the West, existing sales were flat year-over-year.
Despite slumping sales, prices rose in every region. The Northeast had the biggest annual jump, with median prices up nearly 10% to $521,500 in June, while the West claimed the highest median home price of $629,800.