Compared with June of last year, sales were 18.9% lower. That is the slowest sales pace for June since 2009.
The continued weakness in the housing market is not for lack of demand. It’s all about a critical shortage of supply. There were just 1.08 million homes for sale at the end of June, 13.6% less than June of 2022. At the current sales pace, that represents a 3.1-month supply. A six-month supply is considered balanced between buyer and seller.
That dynamic is keeping pressure under home prices. The median price of an existing home sold in June was $410,200, the second highest price ever recorded by the Realtors. Last June’s price was the highest, but by barely 1%. This median measure, however, also reflects what’s selling, and right now, with mortgage rates much higher than last year, the low end of the market is most active.
Sales are unlikely to recover any time soon, as mortgage rates weigh heavy on affordability. The Realtors measure June sales based on closings, so contracts that were Likely signed in April and May. Mortgage rates hung in the mid 6% range during that time and then shot up over 7% at the very end of May. Rates stayed in the 7% range for all of June, as home prices rose.
First-time buyers are struggling the most. Their share of June sales fell to 26%, down from 30% in June 2022. That is the lowest share since the Realtors began tracking this metric.
(source:CNBC)
