Existing-home sales in the United States have plunged to their lowest level since 2010, driven by soaring prices and cautious buyers.
According to the National Association of Realtors (NAR), sales of previously owned homes fell by 5.4% in June compared to May, reaching an annualized rate of 3.89 million.
This decline marks the fourth consecutive month of decreasing sales, significantly below the economists’ forecast of around four million.
Despite an increase in the number of homes entering the market, the median sales price hit a new record of $426,900 in June, a 4.1% rise from the previous month.
Inventory, though slightly up with 1.32 million homes for sale, remains historically low compared to the 1.9 million available in June 2019, before the pandemic. At the current sales pace, it would take 4.1 months to sell all available homes, the longest duration in four years.
NAR’s chief economist, Lawrence Yun, suggests that the rapid rise in prices may not continue at the same pace due to the increasing supply of homes. “Even as the median home price reached a new record high, further large accelerations are unlikely,” Yun said.
Yun noted that the supply and demand dynamics are nearing a balanced market condition, with the months’ supply of inventory at its highest level in more than four years.
All four major U.S. regions experienced month-to-month declines in home sales. On a year-over-year basis, sales fell in the Northeast, Midwest, and South but remained unchanged in the West.
Yun added, “We’re seeing a slow shift from a seller’s market to a buyer’s market.”
The housing market’s slowdown reflects broader economic uncertainties, including fluctuating mortgage rates and affordability challenges.
While the increased supply might offer some relief to potential buyers, the market remains unstable for both buyers and sellers.