A report released by the National Association of Realtors on Wednesday showed existing home sales in the U.S. tumbled by much more than expected in the month of June.
NAR said existing home sales plunged by 5.4 percent to an annual rate of 5.12 million in June after slumping by 3.4 percent to an annual rate of 5.41 million in May. Economists had expected existing home sales to decrease by 0.6 percent to a rate of 5.38 million.
Existing home sales declined for the fifth consecutive month, falling to their lowest level since June of 2020.
“Falling housing affordability continues to take a toll on potential home buyers,” said NAR Chief Economist Lawrence Yun. “Both mortgage rates and home prices have risen too sharply in a short span of time.”
The report said the median existing home price was $416,000 in June, up 1.9 percent from $408,400 in May and up 13.4 percent from the same month a year ago.
NAR noted the median existing home price saw year-over-year growth for the 124th consecutive month, reflecting the longest-running streak on record.
Housing inventory at the end of June totaled 1.26 million units, up 9.6 percent from 1.15 million units at the end of May and up 2.4 percent from 1.23 million units a year ago.
The unsold inventory represents 3.0 months of supply at the current sales pace, up from 2.6 months in May and 2.5 months in June 2021.
Meanwhile, the report said properties typically remained on the market for 14 days in June, down from 16 days in May and 17 days in June 2021. The 14 days on market are the fewest since NAR began tracking the data in May 2011.
“Finally, there are more homes on the market,” Yun said. “Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
NAR also said single-family home sales tumbled by 4.8 percent to an annual rate of 4.57 million in June, while existing condominium and co-op sales plummeted by 9.8 percent to a rate of 550,000.
Next Tuesday, the Commerce Department is scheduled to release its report on new home sales in the month of June.
Economists currently expect new home sales to slump by 2.7 percent to an annual rate of 677,000 in June after surging by 10.7 percent to a rate of 696,000 in May.
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