Patchogue, NY: A “For Sale” sign hangs in front of a home in Patchogue, New York, on June 1, 2024.
Steve Pfost | Newsday | Getty Images
Sales of existing homes fell 5.4% in June compared with May, to 3.89 million units on an annualized and seasonally adjusted basis, according to the National Association of Realtors. Sales were also 5.4% lower than in June of last year. This is the slowest sales pace since December.
These are closed sales, so they are based on contracts signed mostly in April and May, when the average 30-year fixed mortgage rate topped 7%. Rates have since retreated slightly, to the high 6% range.
“We're seeing a slow shift from a seller's market to a buyer's market,” said Lawrence Yun, chief economist for Realtors. “Homes are sitting on the market a little longer and sellers are receiving fewer offers. More buyers are insisting on having homes inspected and appraised, and inventory is definitely increasing nationally.”
Inventory rose 23.4% from a year earlier to 1.32 million units at the end of June, down from historic lows but a supply of just 4.1 months. A 6-month supply is considered balanced between buyer and seller.
These inventory levels are the highest since May 2020, driven by homes staying on the market longer. The average time a home stayed on the market was 22 days, down from 18 days a year ago.
Yet even that new supply isn’t helping to push prices down. The median price of an existing home sold in June was $426,900, up 4.1% year over year and a record high for the second month in a row. Part of that is skewed because the top end of the market is so much stronger.
Sales of homes priced above $1 million were the only price category to see gains over last year, while the biggest drop in sales was in the $250,000 and under range.
The supply of homes for sale is weaker at the lower end, but is now experiencing a new surge. While the national sales price is high, prices for new properties for sale are lower.
“The median sales price remains low due to an influx of smaller, lower-priced properties. In fact, the number of homes for sale priced between $200,000 and $350,000 is up 50% compared to last year,” said Danielle Hale, chief economist at Realtor.com.
High-end buyers tend to use more cash, with 28% of sales being made in cash, up from 26% a year ago. Investors, however, pulled back a bit, accounting for 16% of sales, down from 18% a year ago.
“If inventory continues to rise, two things will happen: either home sales will increase or, if prices don't rise, they will collapse,” Yun added.
