Buyer activity for houses has fallen significantly for June as stock is on the rise. While there is some good news for the industry, it isn’t likely to continue at the rate, currently.
Existing home sales dipped to a seasonally adjusted annual rate of 3.89 million to represent a 5.4 percent drop for the month, according to a report from The National Association of Realtors. In addition, the percentage dip was the same compared to a year ago.
The declines were led by a few major U.S. regions. The Midwest suffered the biggest dip month-over-month, sliding eight percent to 920,000. Plus, sales in the region were down 6.1 percent from the same month a year ago. The Midwest was followed by the South and the West, whose home sales fell 5.9 percent and 2.6 percent, respectively month-over-month The Northeast slipped the least at 2.1 percent.
The overall decline in the industry comes as unsold property jumped 3.1 percent from the previous month in June to 1.32 million. NAR said that was the equivalent of 4.1 months of supply at the current pace.
Interest rates have not changed much. For 30-year mortgages, they average 6.77 percent, as of July 18, inching up from 6.89 percent from the previous week. Also, the year-ago figure was 6.78 percent.
The trade association’s chief economist, Lawrence Yun, admitted that we are now transitioning from a seller’s to a buyer’s market.
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers,” he said.
“More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
In some positive light, median existing home prices hit an all-time high of $426,900, which shot up by 4.1 percent from 12 months ago. The Northeast posted the biggest gains, averaging $521,500, and up 9.7 percent year-over-year. Next was the Midwest, where the region’s median price came in at $327,100, increasing by 5.5 percent compared to June 2023. Also, the West and South posted gains of 3.5 percent and 1.7 percent, respectively.
However, Yun is cautioning the optimism. He said that going forward, “further large accelerations are unlikely.”