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Home sales slump to slowest pace for the month of June in 24 years

The housing industry is seeing a lack of inventory, with hopeful buyers competing to snatch any new listing.
A for sale sign stands in a yard.
Posted at 9:28 PM, Jul 20, 2023

Buying a home doesn't seem to be getting any easier in today's market.

In June, the number of previously owned homes sold to new buyers fell to its slowest pace since January, and its slowest pace for the month of June since 2009, evidence of an inventory issue combined with high prices that are pushing potential buyers out and causing possible sellers to stay put.

June is typically one of the busiest months of the year for home sales. But last month, according to a report from the National Association of Realtors, total existing-home sales fell 3.3% from May and 18.9% since last June. And although it's the same as it was in May, total housing inventory in June is down 13.6% since last year.

So far this year, sales overall are down 23%, and with a critical lack of inventory, the issue seems to lie with pent-up demand.

"There are simply not enough homes for sale," said Lawrence Yun, chief economist for the NAR.

There were 1.08 million homes for sale at the end of last month, the same as the month before but down 13.6% from the year earlier. In a more balanced market of home supply and demand, there would be a 6-month supply of homes; current numbers amount to a 3.1-month supply.

And even with prices decreasing in some areas, the numbers aren't much welcome news.

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The national median sales price fell in June for the fifth month in a row, and was down 0.9% from last year to $410,200. But that's the second-highest monthly median price since 1999, the NAR said. The highest monthly median price was last June at $413,800 and last May. These are the only three times the median price has passed $400,000.

Plus, even though the homes may be listed for less, about one-third of them sold last month went for above list price, and 76% of those sold lasted on the market for less than a month, with many typically lasting just 18 days before being snatched up.

This intense competition and the inevitable bidding wars are hurting first-time homebuyers the most. Annual share of first-time buyers was at its lowest since NAR began tracking the data, at just 26% of home sales in June. Typically, first-time buyers would account for 40%.

This housing market slump started to take effect last year when mortgage rates began climbing as the Federal Reserve tried to get a handle on inflation. Higher mortgage rates can raise costs for homebuyers and keep homeowners where they are to avoid a different rate. 

On Thursday, mortgage buyer Freddie Mac said the average rate on a 30-year home loan fell to 6.78%, which is the lowest rate in four weeks. Last year, the average rate was 5.54%.