- 4.81 million existing homes were sold in July (SAAR), down 5.9% from June and down 20.2% from July 2021, according to the National Association of Realtors (NAR).
- Total housing inventory at the end of July amounted to 1,310,000 units, NAR said, up 4.8% from June and unchanged from one year ago.
- The median existing-home price for all housing types in July was $403,800, up 10.8% from July 2021.
Discouraged buyers pulling back from the for-sale market, coupled with the ongoing inventory crunch, has caused existing home sales to plummet in July to the lowest rate (SAAR) in the last two years. Even with mortgage rates floating down from the June peak and fluctuating around 5%, buyers are feeling their wallets being squeezed by inflation from all sides and are unable to keep up with high housing costs. Homeowners have a hand in these declines too, as very few are putting their homes on the market and giving up their low rates. As a result, home sales are sliding further from the 2021 peak, causing inventory to begin pooling on the market and home prices to fall slightly as buyers walk away and sellers stay put.
While declining prices might sound like welcome news for priced out buyers, a meaningful price drop is unlikely. This rebalancing is good news for buyers who can afford to stay in the market as power is slowly shifting back in their favor. Bidding wars are becoming a thing of the past as competition dwindles and more sellers are cutting their prices, giving buyers who are able to stick around more breathing room. However, conditions aren’t likely to improve for those currently priced out anytime soon. Falling prices should bring demand back to the market and put pressure on prices to go right back up, especially as inventory is stabilizing at a much lower level than the pre-pandemic norm. Low inventory and high demand stuck on the sidelines will remain the driving forces in this market, and home sales should be expected to stay lower than in recent years – at least for the near future – as a result.
Source: Zillow