"We're witnessing a housing recession in terms of declining home sales and home building".
Existing-home sales retreated for the sixth straight month as buyers put their house hunting on pause due to high-interest rates.
According to the National Association of Realtors, existing-home sales fell to a seasonally adjusted rate of 4.81 million, down 5.9% from June and 20.2% from a year ago. Year-over-year, sales fell 20.2% from 6.03 million in July 2021.
“We’re witnessing a housing recession in terms of declining home sales and home building,” said NAR chief economist Lawrence Yun. “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 median existing-home sales price rose 10.8% year over year to $403,800, $10,000 lower than the June peak of $413,800. Total housing inventory at the end of July was 1.31 million units, a 4.8% boost from June and unchanged from the previous year. The inventory of unsold existing homes grew to 1.31 million, or the equivalent of 3.3 months at the current monthly sales pace.
The downturn in sales also reflects the impact of the mortgage rate peak of 6% in early June, according to Yun. The commitment rate for the 30-year mortgage stood at 5.41% in July, down from 5.52% the week prior. That’s compared to the 2.96% average commitment rate across all of 2021.
“Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to home buyers,” he said.