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June Home Sales Slump, Pointing to a Buyer’s Market
As I analyze the latest data from the National Association of Realtors, I notice a significant decline in home sales for June. The sales of previously owned homes dropped 5.4% compared to May, reaching 3.89 million units on a seasonally adjusted, annualized basis. This figure also reflects a 5.4% decrease from June of the previous year, marking the slowest sales rate since December.
The chief economist for the Realtors, Lawrence Yun, notes that we are witnessing a gradual transition from a seller’s market to a buyer’s market. Properties are remaining on the market longer, and sellers are receiving fewer bids. An increasing number of buyers are requesting home inspections and appraisals, and nationwide inventory is definitely on the rise.
At the end of June, the inventory of homes for sale surged by 23.4% from the previous year, reaching 1.32 million units. Although this marks a rebound from record lows, it still represents only a 4.1-month supply, with a balanced market typically characterized by a 6-month supply.
These inventory levels reflect the highest supply since May 2020, driven by homes taking longer to sell. However, this increase in supply has yet to alleviate price pressures. The median price for existing homes in June was $426,900, which is a 4.1% year-over-year increase and the highest figure recorded for the second consecutive month. This trend is partly influenced by a stronger performance in the upper end of the market.
Sales of homes priced above $1 million were the only segment showing growth over the past year, while the most significant decline was observed in the category of homes priced at $250,000 and below. The supply of homes available for sale remains weakest at the lower price points, though there is a recent uptick in listings in this range. Despite high national sales prices, new listing prices are lower.
Danielle Hale, chief economist for Realtor.com, explains, “The median listing price is being suppressed by an influx of lower-priced listings. In fact, the number of homes for sale priced between $200,000 and $350,000 increased by 50% compared to last year.”
Higher-end buyers generally utilize more cash, with 28% of transactions being all-cash sales, an increase from 26% a year prior. However, investor activity has slightly diminished, accounting for 16% of sales, down from 17% last year.
Yun adds, “If inventory continues to expand, two outcomes are possible: either home sales will increase, or if prices do not rise, we may see a stabilization in pricing.”
Original Article: https://www.cnbc.com/2024/07/23/june-home-sales-slump.html
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