Welcome to Extreme Investor Network, where we bring you the latest updates and insights on the ever-changing world of business news. Today, we delve into the recent trends in the housing market that are affecting both buyers and sellers.
According to the National Association of Realtors, sales of previously owned homes saw a 5.4% decrease in June compared to May, totaling 3.89 million units on a seasonally adjusted, annualized basis. This decline in sales is reflective of the shift from a seller’s market to a buyer’s market, with homes staying on the market longer and sellers receiving fewer offers.
One of the key factors impacting the housing market is the increase in mortgage rates, with the average rate on a 30-year fixed mortgage surpassing 7% in April and May. While rates have slightly decreased since then, to the high 6% range, the impact on home sales is evident.
Inventory levels have also seen a significant increase, jumping 23.4% from a year ago to 1.32 million units at the end of June. Despite this surge in inventory, supply remains constrained, with just a 4.1-month supply available, well below the balanced threshold of a 6-month supply.
Interestingly, while inventory levels have risen, prices continue to soar. The median price of an existing home sold in June reached $426,900, marking a 4.1% year-over-year increase and an all-time high for the second consecutive month. Sales of homes priced over $1 million are seeing gains, while the lower-priced market is experiencing the biggest drop in sales.
With the influx of smaller and lower-priced listings, the median listing price is being held down, although new listing prices are lower compared to national sales prices. Additionally, higher-end buyers are more likely to use cash for their purchases, with 28% of sales being all-cash transactions.
Looking ahead, it remains to be seen how the market will evolve as inventory levels continue to increase. As Lawrence Yun, the chief economist for the Realtors, aptly puts it, “Either home sales rise, or, if the prices do not rise, the prices would buckle down.” Be sure to stay tuned to Extreme Investor Network for more in-depth analyses and expert insights on the latest trends in the business world.