U.S. existing home sales fell to the lowest level since 2010 last month as sellers waited for lower mortgage rates and buyers were discouraged by soaring prices.
Existing home sales fell 5.4% from May to an annualized rate of 3.89 million, according to data released Tuesday by the National Association of Realtors (NAR), marking the fourth consecutive month of declines.
Economists had predicted sales of about 4 million vehicles for the year, lower than even the most pessimistic forecasts.
The slowdown comes amid rising prices, with the average sales price increasing 4.1% to a new record of $426,900 in June. Prices are rising despite a growing supply of homes recently, but inventory remains historically low.
There were 1.32 million homes on the market in June, the highest number since October 2020, but still far short of the 1.9 million homes listed before the pandemic in June 2019. At the current sales pace, it would take 4.1 months for all homes on the market to sell, the longest time in four years.
This could be good news for potential buyers, as NAR believes that increasing supply makes it unlikely that prices will continue to rise sharply in the future.
“Although median home prices have hit an all-time high, further significant gains are unlikely,” NAR chief economist Lawrence said. “Supply and demand trends are approaching balanced market conditions, with monthly supply of inventory reaching its highest level in more than four years.”
All four major U.S. regions saw sales decline month-over-month. Year-over-year sales declined in the Northeast, Midwest and South, but were unchanged in the West.
“We are seeing a gradual transition from a seller’s market to a buyer’s market,” Yoon added.
