Sales of previously owned U.S. homes fell to a five-month low in June on limited inventory, also helping to push sales prices near a record low.
Contract closings fell 3.3% to an annualized pace of 4.16 million, roughly in line with economists’ forecasts, data from the National Association of Realtors showed Thursday. Compared to a year earlier, sales were down more than 17% on an unadjusted basis.
The lack of inventory on the resale market remains a major constraint. The number of homes for sale held steady at 1.08 million, the lowest June inventory on record. With mortgage rates more than twice as high as they were at the end of 2021, many homeowners are choosing not to sell their homes.
“There just aren’t enough houses for sale,” Lawrence Yun, NAR’s chief economist, said in a statement. “The market can easily absorb a doubling in stocks.”
Sales of existing homes have deteriorated rapidly over the past year due to the sharp increase in borrowing costs and the resulting collapse in available inventory. Builders have stepped in to fill the void in listings, boosting new home sales and helping to stabilize the housing sector.
While the median sale price – at $410,200 – is slightly lower than a year ago, it is the second highest in data dating back to 1999. Yun said the low supply still leads many homes to receive multiple offers, with a third being sold above the asking price.
At the current rate of sales, it would take 3.1 months to sell all the properties on the market. Realtors see anything less than five months’ supply as a sign of a tight market.
The NAR report showed that 76% of homes sold had been on the market for less than a month. Properties remained on the market for an average of 18 days in June, the same as a month earlier.
Single-family home sales fell at an annualized rate of 3.72 million. Sales of existing condos and co-ops also declined.
Existing home sales typically represent the vast majority of homes in the United States and are calculated at the close of a contract. New home sales data, which makes up the rest and is based on contract signings, is due next week.