![Existing home sales see slowest July pace since 2010](https://image.cnbcfm.com/api/v1/image/107290070-16927130911692713088-30864416179-1080pnbcnews.jpg?v=1692714229&w=750&h=422&vtcrop=y)
Sales of previously owned homes dropped 2.2% in July from June to a seasonally adjusted, annualized rate of 4.07 million units, in line with the National Association of Realtors.
Sales were 16.6% lower compared with July of last yr. Homes sold on the slowest July pace since 2010.
This count is for closings, so contracts were likely signed in May and June, when mortgage rates went from around 6.5% to well over 7%.
Sales fell month to month in all regions except the West, where they rose 2.7%. Sales dropped probably the most in the Northeast, down 5.9%.
The National Association of Realtors is blaming higher rates and still tight supply for the decrease. There have been 1.11 million homes on the market at the tip of July, 14.6% fewer than July 2022 and about half of the pre-Covid supply.
At the present sales pace, that represents a 3.3-month supply. A six-month supply is taken into account balanced between buyer and seller.
Short supply continues to push each competition and costs higher. The median price of a house sold in July was $406,700, a rise of 1.9% from July of last yr.
“The West is the most costly region, nevertheless it’s also the region that experienced some price decline,” said Lawrence Yun, chief economist for the National Association of Realtors.
Prices in July rose in all regions yr over yr except in the West, where they were flat.
Roughly three-quarters of the homes sold were available on the market for lower than a month, indicating still strong demand. About 30% sold for above list price.
“Home shoppers have seen the variety of options dwindle as homeowners are largely content to remain put and revel in their current home, especially those with a low mortgage rate,” said Danielle Hale, chief economist at Realtor.com.
Sales fell across all price categories, but they dropped the least in the best price category: homes over $1 million. That’s because there’s rather more supply on the high end, while the low end of the market is leanest.
Buyers proceed to make use of money to realize a competitive advantage. All-cash sales made up 26% of transactions, the identical as June but up from 24% in July 2022.
Investors, who are inclined to use money most, bought 16% of homes in July. It marked a decrease from 18% in June but was up from 14% in July 2022.
First-time buyers look like gaining steam again. The Realtors reported 30% of sales going to those buyers, up from 27% in June.
Demand for Federal Housing Administration loans can also be increasing. These loans, which provide low down payments, are favored by first-time buyers.
“The housing market is at a pivotal point as we head into fall,” said Lisa Sturtevant, chief economist at Shiny MLS, noting higher mortgage rates in particular. “The choice between renting and buying will tip in favor of renting for some consumers, particularly in markets where rents are falling and recent apartments are coming online.”