AP

US home sales fell in June as prices reach new heights

Jul 20, 2022, 7:03 AM | Updated: Jul 21, 2022, 12:39 am

Sales of previously occupied U.S. homes slowed for the fifth consecutive month in June as higher mortgage rates and rising prices kept many home hunters on the sidelines.

Existing home sales fell 5.4% last month from May to a seasonally adjusted annual rate of 5.12 million, the National Association of Realtors said Wednesday.

That’s lower than the 5.37 million home sales pace economists were expecting, according to FactSet. Sales fell 14.2% from June last year.

After climbing to a 6.49 million annual rate in January, sales have fallen to the slowest pace since June 2020, near the start of the pandemic, when they were running at an annualized rate of 4.77 million homes. Excluding the pandemic-related slowdown, sales in June were running at the slowest pace since January 2019.

Even as home sales slowed, home prices kept climbing in June. The national median home price jumped 13.4% in June from a year earlier to $416,000. That’s an all-time high according to data going back to 1999, NAR said. Despite the increase, home prices are not climbing as much as they were earlier this year.

“With each passing month it appears price appreciation is less strong than earlier months,” said Lawrence Yun, NAR’s chief economist.

The June’s sales report is the late evidence that the housing market, a key driver of economic growth, is slowing as homebuyers grapple with sharply higher mortgage rates than a year ago.

“A combination of higher prices and higher mortgage rates clearly has shifted the dynamics in the housing market,” Yun said. “Home sales will only begin to stabilize once mortgage rates begin to stabilize.”

The average rate on a 30-year fixed-rate home loan climbed to 5.51% last week, according to mortgage buyer Freddie Mac. A year ago it averaged 2.88%.

Mortgage rates have been climbing in response to a sharp increase in 10-year Treasury yields, reflecting expectations of higher interest rates overall as the Federal Reserve raises its benchmark rate in a bid to quell the highest inflation in decades.

Even with higher mortgage rates straining affordability, homes that sold didn’t stay on the market for long. On average, homes sold in just 14 days of hitting the market last month, the fastest sales pace tracked by the NAR. It was 16 days in May. Before the pandemic, homes typically sold more than 30 days after being listed for sale.

House hunters able to navigate the impact of higher mortgage rates had a wider selection of homes to choose from last month, at least. The number of properties for sale jumped 9.6% from May to 1.26 million, and rose 2.4% from June last year — the first annual increase in three years, Yun said.

Still, at the current sales pace, the level of for-sale properties amounts to a 3-month supply, the NAR said. That’s up from 2.6 months in May, and 2.5 months a year ago. That’s still short of the 5- to 6-month supply that reflects a more balanced market between buyers and sellers.

Despite the still-tight supply of homes for sale, rising mortgage rates and prices, first-time buyers accounted for 30% of sales last month, NAR said. That’s up from 27% in May, but still low by historical standards, when first-time buyers made up as much as 40% or more of transactions.

Real estate investors and other buyers able to buy a home with just cash, sidestepping the need to rely on financing, accounted for 25% of all sales last month, NAR said.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

Lead water pipes pulled from underneath the street are seen in Newark, N.J., Oct. 21, 2021. (AP Pho...

Associated Press

Biden to require cities to replace harmful lead pipes within 10 years

The Biden administration has previously said it wants all of the nation's roughly 9 million lead pipes to be removed, and rapidly.

5 days ago

Facebook's Meta logo sign is seen at the company headquarters in Menlo Park, Calif., on, Oct. 28, 2...

Associated Press

Meta shuts down thousands of fake Facebook accounts that were primed to polarize voters ahead of 2024

Meta said it removed 4789 Facebook accounts in China that targeted the United States before next year’s election.

5 days ago

A demonstrator in Tel Aviv holds a sign calling for a cease-fire in the Hamas-Israel war on Nov. 21...

Associated Press

Hamas releases a third group of hostages as part of truce, and says it will seek to extend the deal

The fragile cease-fire between Israel and Hamas was back on track Sunday as the first American was released under a four-day truce.

9 days ago

Men look over the site of a deadly explosion at Al-Ahli Hospital in Gaza City, Wednesday, Oct. 18, ...

Associated Press

New AP analysis of last month’s deadly Gaza hospital explosion rules out widely cited video

The Associated Press is publishing an updated visual analysis of the deadly Oct. 17 explosion at Gaza's Al-Ahli Hospital.

13 days ago

Peggy Simpson holds a photograph of law enforcement carrying Lee Harvey Oswald's gun through a hall...

Associated Press

JFK assassination remembered 60 years later by surviving witnesses to history, including AP reporter

Peggy Simpson is among the last surviving witnesses who are sharing their stories as the nation marks the 60th anniversary.

13 days ago

Israeli Prime Minister Benjamin Netanyahu, chairs the weekly cabinet meeting in Jerusalem, Sunday, ...

Associated Press

Israeli Cabinet approves cease-fire with Hamas; deal includes release of 50 hostages

Israel’s Cabinet on Wednesday approved a cease-fire deal with the Hamas militant group that would bring a temporary halt to a devastating war.

14 days ago

Sponsored Articles

(KTAR News Graphic)...

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

Follow @KTAR923...

West Hunsaker at Morris Hall supports Make-A-Wish Foundation in Arizona

KTAR's Community Spotlight this month focuses on Morris Hall and its commitment to supporting the Make-A-Wish Foundation in Arizona.

...

Desert Institute for Spine Care

Desert Institute for Spine Care (DISC) wants to help Valley residents address back, neck issues through awake spine surgery

As the weather begins to change, those with back issues can no longer rely on the dry heat to aid their backs. That's where DISC comes in.

US home sales fell in June as prices reach new heights