Existing Home Sales Fall as Rates, Wintertime Play Role

ARLINGTON, Va.—Existing home sales fell 3.3% in June to a seasonally-adjusted annual rate of 4.16 million units, representing an 18.2% decrease in sales versus a year ago, according to National Association of Realtors data.

“Last month, existing home sales fell by just over 3% to a level slightly above the winter trough. Sales for the first half of the year were depressed, and the declines since March coincide with rising mortgage rates over that period,” said NAFCU Chief Economist and Vice President of Research Curt Long.

In June, sales were mixed across the regions. Sales fell the most in the South (-5.4%) and the West (-5.1%). Sales remained flat in the Midwest but rose in the Northeast (+2%), the NAR reported.

Three Months of Supply

Based on current sales, there were nearly 3.1 months of supply at the end of June. Analysts consider 6 months of inventory a rough balance between supply and demand, Long said.

The median existing home price, not seasonally-adjusted, rose by 3.5% in June to $410,200, a 0.9% decline versus a year ago, Long said.

‘Pent-Up Demand’ Issues

“With the Fed nearing the end of the ongoing tightening cycle, potential buyers may have put off purchases in hopes that mortgage rates will soon decline,” Long said. “If such a scenario plays out, the release of pent-up demand is unlikely to be matched with a corresponding improvement in supply, resulting in stronger price growth. NAFCU expects supply constraints to continue to hamper housing sales for the rest of 2023.”

CUToday