Existing-home sales in July were at a seasonally adjusted annual rate of about 5.34 million, down 0.7% compared with about 5.38 million in June and down 1.5% compared with July 2017, according to the National Association of Realtors (NAR).
It was the fifth consecutive month that existing-home sales fell on a year-over-year basis and the fourth consecutive month that they fell on a month-over-month basis.
Regionally, existing-home sales fell 8.3% in the Northeast, 1.6% in the Midwest and 0.4% in the South, month-over-month, but increased 4.4% in the West.
“Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million,” says Lawrence Yun, chief economist, for NAR, in a statement. “Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market.”
The median price for an existing home, including condos and co-ops, in July was $269,600, an increase of 4.5% compared with $258,100 in July 2017.
July marked the 77th straight month of year-over-year gains for the median home price.
As of the end of July there were about 1.92 million existing homes available for sale, a decrease of 0.5% compared with June but unchanged compared with July 2017. That’s about a 4.3-month supply at the current sales pace.
Properties typically stayed on the market for 27 days in July, up from 26 days in June but down from 30 days a year earlier.
Fifty-five percent of homes sold in July were on the market for less than a month.
“Listings continue to go under contract in under month, which highlights the feedback from Realtors that buyers are swiftly snatching up moderately-priced properties,” Yun says. “Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand.”
Yun says in addition to the steady climb in home prices over the past year, the quick run-up in mortgage rates earlier this spring had somewhat of a cooling effect on home sales.
“This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market,” he says.
First-time buyers were 32% of home sales in July, up from 31% in June but down from 33% in July 2017.
All-cash sales were 20% of transactions in July, down from 22% in June but up from 19% a year ago. Individual investors, who account for many cash sales, purchased 13% of homes in July, unchanged from the previous month and a year earlier.
Distressed sales – foreclosures and short sales – represented just 3% of sales in July, unchanged compared with the previous month but down from 5% compared with a year earlier to reach the lowest level since NAR began tracking the data in October 2008.