Existing home sales fell 5.9% in July

National Association of Realtors confirmed on Wednesday that real estate sales have declined by 5.9% to 4.81 million in July. This represents the 6th month in a row where sales have dropped.

The total number of sales was close the number predicted by the Wall Street Journal. Home sales were down by 20.21% compared to July. The average price for a home climbed by 10.8% from last year to $403,800. This however is $10,000 down from last month’s record high of $413,800. The inventory of unsold homes on the market increased to 1.31 million by the end of July.

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

“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun went on to say. “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.”

The average amount of time for a property to remain on the market in July was 14 days, this is down from 17 days in July 2021. An average of 14 days on the market is the lowest amount of time since NAR started tracking sales in May 2011.

First-time buyers accounted for 29% of sales in July, which is a slight decrease from 30% in June and also in July 2021. NAR’s 2021 Profile of Home Buyers and Sellers, which was released in late 2021, stated that that the annual share of first-time buyers was 34%.

Cash buyers made up 24% of transactions in July, which is down from 25% in June, but is a small increase from the 23% in July 2021. Individual investors or those buying an additional home, many of whom make up a sizeable number of the cash sales, purchased 14% of homes in July, down from 16% in June and 15% in July 2021.

Distressed sales, foreclosures and short sales, made up roughly 1% of sales in July, which is largely unchanged from June 2022 and July 2021.