Existing home sales in July fell to the lowest level since January as limited inventory and higher mortgage rates continued to weight on homebuyers, according to the National Association of Realtors (NAR). Low resale inventory and strong demand continued to drive up existing home prices, marking the first year-over-year price increase since January.
Total existing home sales, including single-family homes, townhomes, condominiums and co-ops, fell 2.2% to a seasonally adjusted annual rate of 4.07 million in July. On a year-over-year basis, sales were 16.6% lower than a year ago.
The first-time buyer share rose to 30% in July, up from 27% in June and 29% in July 2022. The July inventory level measure increased slightly to 1.11 million units but was down 14.6% from a year ago.
At the current sales rate, July unsold inventory sits at a 3.3-months’ supply, up from 3.1-month last month and 3.2-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 20 days in July, up from 18 days in June and 14 days in July 2022. In July, 74% of homes sold were on the market for less than a month.
The July all-cash sales share was 26% of transactions, identical to June but up from 24% a year ago. All-cash buyers are less affected by changes in interest rates.
The July median sales price of all existing homes was $406,700, up 1.9% from a year ago. The median existing condominium/co-op price of $357,600 in July, up 4.5% from a year ago.
Geographically, all four regions observed a decrease in existing home sales in July, ranging from 11.5% in the Northeast to 14.7% in the Midwest. On a year-over-year basis, all four regions continued to see a double-digit decline in sales, ranging from 14.1% in the West to 24.6% in the Northeast.
The Pending Home Sales Index (PHSI) is a forward-looking indicator based on signed contracts. The PHSI rose 0.3% from 76.6 to 76.8 in June. On a year-over-year basis, pending sales were 15.6% lower than a year ago per the NAR data.