The U.S. housing market hit a rough patch in June, with existing home sales falling more than expected.
The National Association of Realtors reported sales dropped 5.4% to an annual rate of 3.89 million units, the lowest since December.
This was worse than economists had predicted.
Despite fewer sales, home prices kept climbing.
The median price hit a new record of $426,900, up 4.1% from last year.
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This marks two months in a row of record-breaking prices across all regions.
Sales fell across the country, with the South and Midwest seeing the biggest drops.
Existing home sales drop 5.4%. pic.twitter.com/wyeHXRPQnH
— Kathy Jones (@KathyJones) July 23, 2024
But there’s a silver lining: more houses are coming on the market.
Housing inventory rose 3.1% to 1.32 million units, a big jump from last year.
Mortgage rates are also improving.
The average 30-year fixed-rate mortgage fell to 6.77% last week, down from May’s high of 7.22%.
This could bring more buyers back to the market.
But challenges remain.
Rising insurance costs due to more weather-related claims are forcing some homeowners to sell.
There’s also still a shortage of starter homes and not enough new construction.
Existing single-family home sales have plunged by nearly 40% from the cycle high … yet the median price of an existing single-family home is at an all-time high pic.twitter.com/wG82IQgPgF
— Kevin Gordon (@KevRGordon) July 23, 2024
The market is inching towards balance.
At June’s sales pace, it would take 4.1 months to sell all available homes – the highest level in over four years.”
First-time buyers made up 29% of sales, up slightly from last year but still below the 40% seen as ideal for a healthy market.
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All-cash sales accounted for 28% of deals, while distressed sales remained low at 2%.
