Existing Home Sales Fall for Third Month

Inventory was actually higher in June, climbing 4.3 percent to 1.95 million existing homes available for purchase. On a year-over-year basis, inventory rose for the first time since June 2017, increasing 0.5 percent from a year ago. Inventory is at a 4.3-month supply at the current sales rate, up from 4.1 months in May and 4.2 months a year ago.

“It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels,” added Yun. “Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”

Prices for single-family homes continued to rise in June, up 5.2 percent year-over-year to a median price of $279,300. The median price for existing condos and co-ops increased 4.9 percent to $258,100.

“Existing home sales have plateaued over the past year and a half, even as prices have risen to new highs – yet another signal that the post-recession rebound in home buying has seemingly run its course,” said Aaron Terrazas, a senior economist for Zillow. “Today’s data will undoubtedly raise questions as to whether the housing market has reached an inflection point after years of sellers holding the upper hand — even though any gains for buyers at this point will be marginal, at best, and in the near term the market is more likely to become simply less frenetic and not meaningfully slower.”

“If there is some good news it’s that inventory seems to have reached a floor and has been mostly stable since the end of 2017,” added Terrazas. “Still, even though inventory has bottomed out, it isn’t yet climbing back up toward more normal levels—and overall numbers mask a big divide between the top and bottom of the markets. Builders are focused largely at the top of the market, and buyers at the highest price points may find things slowly shifting in their favor over the next few months. But the market remains very competitive for entry-level homes.”

The regional breakdown of sales and pricing in June was as follows:

• Northeast: up 5.9 percent to an annual rate of 720,000; median price up 3.3 percent y/y to $305,900
• Midwest: up 0.8 percent to an annual rate of 1.27 million; median price up 3.5 percent y/y to $218,800
• South: down 2.2 percent to an annual rate of 2.25 million; median price up 2.7 percent y/y to $237,500
• West: down 2.6 percent to an annual rate of 1.14 million; median price up 10.2 percent y/y to $417,400