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

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

“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

Top Stories

National News

CANBERRA, AUSTRALIA - APRIL 28: The Coolio set during Groovin The Moo 2019 on April 28, 2019 in Can...
Sandra Gonzalez, CNN

Coolio, ‘Gangsta’s Paradise’ rapper, dead at 59

Coolio, the '90s rapper who lit up the music charts with hits like "Gangsta's Paradise" and "Fantastic Voyage," has died.
1 day ago
Pictured here is Gulfshore Boulevard. (City of Naples via CNN)...
Caroll Alvarado and Christina Maxouris, CNN

Floating cars, submerged buildings, no power: Floridians describe Hurricane Ian

Hurricane Ian, which made landfall as a Category 4 storm a little after 3 p.m. Wednesday along Florida's southwestern coast, has been battering coastal communities for hours.
1 day ago
Hotel-casinos on the Las Vegas Strip. (Ethan Miller/Getty Images)...
Associated Press

Inmate serving life for fatal Vegas bombing escapes prison

Authorities are searching for a 42-year-old convicted bombmaker who escaped from a Nevada prison where he was serving a life sentence for a deadly 2007 explosion outside a Las Vegas Strip resort. Gov. Steve Sisolak ordered an investigation into the incident late Tuesday after he said his office learned the escapee had been missing from the medium-security prison since early in the weekend. Porfirio Duarte-Herrera was convicted in 2010 of killing the boyfriend of his co-defendant's ex-girlfriend using a motion-activated coffee cup bomb placed atop a car parked at the Luxor hotel-casino. The blast initially raised fears of a terrorist attack on the Strip.
1 day ago
FILE: The life expectancy of dogs can be six to 12 times shorter than humans....
Megan Marples, CNN

Dogs can smell when humans are stressed, study suggests

Dogs can smell the difference between odors from humans when they're stressed and when they're calm, according to a study.
1 day ago
President Joe Biden on September 28 asked if a congresswoman who died last month was present at a W...
Maegan Vazquez

Biden asks if deceased congresswoman is present at White House media event

President Joe Biden on Wednesday asked if a congresswoman who died last month was present at a White House food insecurity conference.
1 day ago
Mount Everest is shown at approximately 8,850-meter (29,035-foot) in Nepal, 2003. (Paula Bronstein/...
John Sinnott and Alex Stambaugh, CNN

Hilaree Nelson’s body found after US ski mountaineer dies during Nepal expedition

The body of Hilaree Nelson was found Wednesday and taken to a forensic laboratory in Kathmandu for an autopsy after the renowned US ski mountaineer died during an expedition in Nepal, according to Sachindra Kumar Yadav, an official with the tourism department.
1 day ago

Sponsored Articles

Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Ask these questions before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Cloud storage technology with 3d rendering drawer with files in cloud...
PC Laptops

How backing up your computer can help you relieve stress

Don't wait for something bad to happen before backing up your computer. Learn how to protect your data before disaster strikes.
young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
tips how to quit smoking...

7 Tips How to Quit Smoking | Quitting Smoking Might be One of the Hardest Things You Ever Do but Here’s Where You Can Start

Quitting smoking cigarettes can be incredibly difficult. Here are 7 tips how to quit smoking to help you on your quitting journey.
Home sales fell for the sixth month in a row, but prices kept rising