PATCHOGEE, New York: A for sale sign hangs in front of a home in Patchogue, New York, on June 1, 2024.
Steve Pfust | Newsday | Getty Images
Sales of previously owned homes fell 5.4% in June from May, to a seasonally adjusted annual rate of 3.89 million units, according to the National Association of Realtors. Sales were down 5.4% from June a year ago. That’s the slowest sales pace since December.
These are closed sales, so they’re based on contracts signed mostly in April and May, when the average interest rate on a 30-year fixed mortgage jumped to above 7%. Rates have eased back slightly since then, to the high 6% range.
“We are seeing a slow shift from a seller’s market to a buyer’s market,” said Lawrence Yun, chief economist for the Realtors Association. “Homes are sitting on the market a little longer, sellers are receiving fewer offers, more buyers are insisting on home inspections and appraisals, and inventory is rising sharply nationwide.”
Inventories rose 23.4% from a year ago to 1.32 million units at the end of June, after hitting an all-time low, but still only enough to last 4.1 months. A 6-month supply is considered balanced between buyers and sellers.
These inventory levels are the highest since May 2020, thanks to homes staying on the market longer. The average time a home was on the market was 22 days, up from 18 days a year ago.
But even that new supply isn’t helping prices. The median price of an existing home sold in June was $426,900, up 4.1% year over year and the highest level on record for the second straight month. Part of that is because the top end of the market is much stronger.
Sales of homes priced over $1 million were the only price category to see gains from a year ago, while the biggest decline was in sales in the $250,000 and under range.
The supply of homes for sale is weakest at the lower end, but is now seeing a new uptick. While the national selling price is high, new listing prices are lower.
“The average listing price is falling due to an influx of smaller, lower-priced listings. In fact, the number of homes for sale in the $200,000 to $350,000 price range is up 50% compared to last year,” said Danielle Hill, chief economist at Realtor.com.
Higher-income buyers tended to use more cash, with 28% of sales being all-cash, compared with 26% a year ago. But investors held back slightly, accounting for 16% of sales, compared with 18% a year ago.
“If we assume that inventory continues to rise, two things will happen,” Yun added. “Either home sales will rise, or if prices don't rise, they will fall sharply.”
