Existing home sales fell another 5.4% in June to a seasonally adjusted 5.12 million year on year. This is the fifth straight month of decline, leaving the pace of sales at the lowest level since June 2020 after the lockdown recession. Sales were down 14.2% year-over-year and 21.1% down from their January peak.
Single-family existing home market sales, which account for about 89 percent of total existing home sales, fell 4.8 percent in June to a seasonally adjusted 4.57 million year-on-year (see first chart) . Sales were down 12.8% year-over-year and 20.5% down from their January peak. Single-family home sales are also falling for the fifth month in a row and were the slowest since June 2020.
In the single-family segment, sales declined in three of the four regions. Sales fell 10.6% in the West, 5.6% in the South, the largest region by volume, and 0.9% in the Midwest, while sales were unchanged in the Northeast, the smallest region by volume. . Compared to last year, sales were down in all four regions (-20.8% in the West, -11.5% in the South, -11.1% in the Northeast, and -9.4% in the Midwest).
Condominium and co-op sales fell 9.8% on the month, bringing sales to 550,000 a year from 610,000 in May (see first chart). Compared to last year, apartment and co-op sales were down 24.7% and were the slowest since June 2020.
Condominium and co-op sales declined across the three regions in June, falling 14.3% in the West, 12.5% in the Midwest and 10.7% in the South, while sales were flat in the Northeast. Compared to last year, sales were down in all four regions (-30.6% in the South, -25.0% in the West, -15.4% in the Northeast, and -12.5% in the Midwest).
The total stock of existing homes for sale rose 9.6 percent to 1.26 million in June, bringing monthly supply (inventory x 12 divided by annual sales rate) up 0.4 months to 3.0 , which is the highest since November 2020 but still low at 0.4 months. historical comparison, but the fifth consecutive increase.
In the single-family segment, inventories rose 9.8% MoM to 1.12 million, up 5.7% from June 2021 levels. The offer for the month was 2.9 compared to 2.6 the previous month, which is in line with the result for July 2020 (see second chart).
Inventories of apartments and cooperatives increased by 7.7 percent to 140,000, bringing monthly supply up to 3.1 from 2.6 in May. The monthly supply is 10.7% higher than in June 2021 and has grown for five consecutive months.
The median selling price for an existing home in June was $416,000, up 13.4% from last year’s price and a new record. For the sale of existing single-family homes in June, the price was $423,300, up 13.3% from last year and a record high (see chart three). The average condo/co-op price was $354,900, up 11.5% from June 2021 and also an all-time high. At the same time, mortgage rates have recently skyrocketed, reaching 5.50% by mid-July (see chart three).
The combination of record high home prices and a sharp increase in mortgage rates has led to a drop in housing affordability. The Home Affordability Index from the National Association of Realtors measures whether a typical family qualifies for a mortgage on a typical home. A typical home is defined as an existing single-family home at a national average price calculated by NAR. The typical family is defined as the family earning the median household income, according to the US Census Bureau. A value of 100 means that a middle-income family has enough income to qualify for a home mortgage at an average price. An index above 100 means that a middle-income family has more than enough income to qualify for a home mortgage at an average price, assuming a down payment of 20%. As of May, the index stood at 102.5, its lowest level since July 2006 (see chart four).
Housing is likely to come under intense pressure as record high prices and a recent rise in mortgage rates reduce affordability and push more and more buyers out of the market.