On the Site:

NATIONAL NEWS

Home sales fell for the sixth month in a row, but prices kept rising

Aug 18, 2022, 11:24 AM | Updated: Aug 23, 2022, 11:11 am

Home sales declined for the sixth month in a row in July as higher mortgage rates and prices push p...

Home sales declined for the sixth month in a row in July as higher mortgage rates and prices push prospective buyers out of the market. A 'for sale' sign hangs in front of a home on June 21 in Miami. (Joe Raedle/Getty Images)

(Joe Raedle/Getty Images)

(CNN) — Home sales declined for the sixth month in a row in July as higher mortgage rates and prices push prospective buyers out of the market.

Nevertheless, home prices continued to climb by double-digit percentages during the month. The median home price was $403,800 in July, up 10.8% from a year ago but slightly lower than the record high reached last month, according to a report from the National Association of Realtors. The price increase marks more than a decade of year-over-year monthly gains.

Meanwhile, sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — were down 20.2% from a year ago and down 5.9% from June.

Sales in July were at their weakest level since May 2020, which was an anomaly because that was amidst the pandemic lockdown. Setting that aside, sales last month were the weakest they have been since November 2015.

“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” said Lawrence Yun, NAR’s chief economist. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers.”

One reason home prices have climbed so high is a lack of supply. The number of homes on the market had been steadily dropping for three years. But July saw a monthly increase. The number of homes available for sale at the end of July was up 4.8% from June and about the same as a year ago.

“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun said. “However, it’s not a recession in home prices. Inventory remains tight and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”

Sales down, but market remains strong

Many potential home buyers put their search on hold as mortgage rates climbed this spring and summer, said Danielle Hale, chief economist for Realtor.com.

First-time home buyers dropped to 29% of all buyers in July, down from 30% in June, according to NAR.

“Fortunately, mortgage rates have since eased from those peaks, but shoppers who saw the mortgage rate landscape shift so suddenly are likely to remember the experience and have one more reason to hold back on offering top dollar,” said Hale.

Home prices, meanwhile, continued to climb but at a slower pace, said Hale. As buyer demand slows, she said she expects the housing market to get back toward a more normal pace of activity.

Already, there are signs that competition to buy a home is starting to ease. In July, for-sale homes received an average of 2.8 offers compared to 4.5 offers per home a year ago, according to NAR.

The market is also starting to see price cuts. Home listings were nearly twice as likely to have had a price cut in July compared to one year ago, Hale said.

All geographic regions and all price ranges saw home sales drop. But even as sales slow and competition eases, homes are moving on and off the market at the fastest pace ever.

Homes were on the market only 14 days in July. A year ago, they stayed on the market for 17 days.

A well-priced home sells very quickly now, said Yun.

“It could be a residual effect from buyers being in a multiple-offer situation. They were outbid,” he said. “When they see a home come to market that is the right price, they want to move fast.”

Inventory flat as sellers hold back

The slowing market is also impacting homeowner’s eagerness to sell.

Some sellers, seeing prices being cut and mortgage rates remain elevated, are holding back on listing their home.

The number of newly listed homes shrank in July, according to Realtor.com

“This pullback from sellers could slow the speed at which the housing market rebalances, meaning that buyers looking for more bargaining power may need to be patient,” said Hale.

After growing year-over-year in June, housing inventory was flat in July, said Yun.

“We saw more inventory last month, but now we are not seeing that increase in inventory,” he said. “It could be a lock-in effect with homeowners. They have 3% interest rates now and if they want to give up their home, they will be facing higher mortgage rates. That may be preventing the increase in inventory.”

More inventory should help ease the price appreciation, said Yun.

At the current sales pace it would take 3.3 months to exhaust the current supply of homes.

“We need … four or five months to see price appreciation come back to more typical 5% appreciation.”


The-CNN-Wire™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

National News

Milwaukee Police Chief Jeffrey Norman speaks during a news conference about a man shot and killed b...

Steve Almasy and Cindy VonQuednow, CNN

Police from Ohio assisting with security at Republican National Convention fatally shoot man

Ohio police officers who were in Milwaukee to help with security at the Republican National Convention shot and killed a man Tuesday who local authorities said had knives in both hands and was trying to attack another man.

7 hours ago

The live snails were discovered by US Customs and Border Protection at Detroit Metropolitan Airport...

Lauren Rapp and Nic F. Anderson, CNN

90 giant African snails ‘intercepted’ at Detroit airport

For the second time in as many years, African snails have been confiscated from bags at the Detroit Metropolitan Airport.

8 hours ago

...

John Miller and Sabrina Shulman, CNN

Trump shooter requested Saturday off from work said he’d be back on Sunday, officials say

The shooter who attempted to assassinate former President Donald Trump on Saturday normally would have been at work that day, but he told his boss he needed that the day off because he had “something to do,” according to multiple law enforcement officials.

9 hours ago

Major changes are coming to the ACT college admissions exam in the spring, the CEO of ACT announced...

Nic F. Anderson and Jason Hanna, CNN

Changes coming to ACT exam, including the science portion being made optional

Major changes are coming to the ACT college admissions exam in the spring, the CEO of ACT announced Monday.

10 hours ago

Team USA climber Jesse Grupper getting a workout in Tuesday morning before traveling to compete in ...

Alex Cabrero

Ten days until Paris Opening Ceremony, USA Climbing ready to meet expectations

The United States is the only country to qualify a full team of eight climbers. USA climber Jesse Grupper and USA Climbing CEO Marc Norman said the team is eager and ready to meet high expectations.

11 hours ago

Confiscated guns are stored in the Hennepin County Sheriff’s Office in February 2015, in Minneapo...

Devan Cole, CNN

Minnesota ban on 18- to 20-year-olds obtaining handgun permits is unconstitutional, federal appeals court says

Minnesota’s ban on 18- to 20-year-olds obtaining a permit to publicly carry a handgun violates the US Constitution, a federal appeals court ruled Tuesday.

12 hours ago

Sponsored Articles

young male technician is repairing a printer at office...

Les Olson

Unraveling the dilemma between leasing and buying office technology

Carefully weigh these pros and cons to make an informed decision that best suits your business growth and day-to-day operation. 

A kitchen in a modern farmhouse....

Lighting Design

A room-by-room lighting guide for your home

Bookmark this room-by-room lighting guide whenever you decide to upgrade your lighting or style a new home.

Photo courtesy of Artists of Ballet West...

Ballet West

The rising demand for ballet tickets: why they’re harder to get

Ballet West’s box office is experiencing demand they’ve never seen before, leaving many interested patrons unable to secure tickets they want.

Electrician repairing ceiling fan with lamps indoors...

Lighting Design

Stay cool this summer with ceiling fans

When used correctly, ceiling fans help circulate cool and warm air. They can also help you save on utilities.

Side view at diverse group of children sitting in row at school classroom and using laptops...

PC Laptops

5 internet safety tips for kids

Read these tips about internet safety for kids so that your children can use this tool for learning and discovery in positive ways.

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why printer security should be top of mind for your business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Home sales fell for the sixth month in a row, but prices kept rising