Existing Home Sales Down Again Amid Limited Inventory

Existing home sales in June fell to the lowest level since January as limited inventory and fluctuating mortgage rates continued to weight on homebuyers, according to the National Association of Realtors (NAR). Low resale inventory and strong demand pushed existing home prices to the highest level in a year and contributed to the recent increases in new home sales.

Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 3.3% to a seasonally adjusted annual rate of 4.16 million in June. On a year-over-year basis, sales were 18.9% lower than a year ago.

The first-time buyer share fell to 27% in June, down from 28% in May and 30% in June 2022. The June inventory level measure was unchanged at 1.08 million units but was down 1.25 million from a year ago.

At the current sales rate, June unsold inventory sits at a 3.1-months’ supply, up from 3.0-month last month and 2.9-months reading a year ago. This inventory level remains very low, compared to balanced market conditions (4.5 to 6 months’ supply), and illustrates the long-run need for more home construction.

Homes stayed on the market for an average of 18 days in June, identical to May but up from 14 days in June 2022. In June, 76% of homes sold were on the market for less than a month.

The June all-cash sales share was 26% of transactions, up from 25% both last month and a year ago. All-cash buyers are less affected by changes in interest rates.

The June median sales price of all existing homes was $410,200, the second highest price of all time but down 0.9% from a year ago. The median existing condominium/co-op price of $361,600 in June, up 1.9% from a year ago.

Existing home sales in June were mixed across the four major regions. Sales in the South and West decreased 5.4% and 5.1% in June, while sales in the Northeast rose 2.0%. Sales in the Midwest remained unchanged in June. On a year-over-year basis, all four regions continued to see a double-digit decline in sales, ranging from 16.2% in the South to 22.7% in the West.

The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI fell 2.7% from 78.6 to 76.5 in May. On a year-over-year basis, pending sales were 22.2% lower than a year ago per the NAR data.