NAR’s chief economist calls 2023 so far “a real downer,” with sales 23% lower. As pent-up demand grows, the “market can easily absorb a doubling of inventory.”
WASHINGTON – Existing-home sales slipped in June, according to the National Association of Realtors® (NAR), though it varied by region month-to-month: The Northeast saw gains, the Midwest held steady, and the South and West posted declines
Year-over-year, however, all four regions recorded declines.
Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Year-over-year, sales fell 18.9% (down from 5.13 million in June 2022).
“The first half of the year was a downer for sure, with sales lower by 23%,” says NAR Chief Economist Lawrence Yun. “Fewer Americans were on the move despite the usual life-changing circumstances. The pent-up demand will surely be realized soon, especially if mortgage rates and inventory move favorably.”
Total housing inventory registered at the end of June was 1.08 million units, identical to May but down 13.6% from one year ago (1.25 million). Unsold inventory sits at a 3.1-month supply at the current sales pace, up from 3.0 months in May and 2.9 months in June 2022.
“There are simply not enough homes for sale,” Yun says. “The market can easily absorb a doubling of inventory.”
The median existing-home price for all housing types in June was $410,200, the second-highest price of all time and down 0.9% from the record-high of $413,800 in June 2022.
The monthly median price surpassed $400,000 for only the third time, joining June 2022 and May 2022 ($408,600). Prices rose in the Northeast and Midwest but waned in the South and West.
“Home sales fell but home prices have held firm in most parts of the country,” Yun says. “The national median home price in June was slightly less than the record high of nearly $414,000 in June of last year. Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month.”
June housing report insights
Properties typically remained on the market for 18 days in June, identical to May but up from 14 days in June 2022. For the month, three out of four (76%) homes were on the market for less than a month.
First-time buyers made up 27% of sales in June, down from 28% in May and 30% in June 2022.
All-cash sales accounted for 26% of June’s transactions in June, up from 25% in both May 2023 and June 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in June, up from 15% in May and 16% the previous year.
Distressed sales – foreclosures and short sales – represented 2% of sales in June, virtually unchanged from last month and the prior year.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.96% as of July 13. That’s up from 6.81% the previous week and 5.51% one year ago.
Single-family and condo/co-op sales: Single-family home sales decreased to a seasonally adjusted annual rate of 3.72 million in June, down 3.4% from 3.85 million in May and 18.8% from the previous year. The median existing single-family home price was $416,000 in June, down 1.2% from June 2022.Existing condominium and co-op sales recorded a seasonally adjusted annual rate of 440,000 units in June, down 2.2% from May and 20.0% from one year ago. The median existing condo price was $361,600 in June, up 1.9% from the previous year ($354,800).
Regional breakdown: Existing-home sales in the Northeast grew 2.0% month-to-month to an annual rate of 510,000 in June, down 21.5% from June 2022. The median price in the Northeast was $475,300, up 4.9% from the prior year.In the Midwest, existing-home sales were unchanged from one month ago at an annual rate of 990,000 in June, slumping 19.5% from one year ago. The median price in the Midwest was $311,800, up 2.1% from June 2022.Existing-home sales in the South faded 5.4% from May to an annual rate of 1.91 million in June, a decrease of 16.2% from the previous year. The median price in the South was $366,600, down 1.2% from June 2022.In the West, existing-home sales declined 5.1% from the previous month to an annual rate of 750,000 in June, down 22.7% from one year ago. The median price in the West was $606,500, down 3.4% from June 2022.
A pair of reports out Tuesday reveals that U.S. home prices ticked up slightly in April compared to March, though the reports also offered mixed signals about how well the market is holding up over the longer term.
Selma Hepp
Of Tuesday’s new numbers, the S&P CoreLogic Case-Shiller Index shows the biggest month-over-month gains in April, rising 1.3 percent. In a blog post on the numbers, CoreLogic Chief Economist Selma Hepp described this uptick as a “strong gain” for home prices and notes that it suggests “homebuying activity is heating up in many markets.”
“In addition, price gains among high-tier homes are once again showing a strong rebound,” Hepp added in a statement.
April’s gains represent the third consecutive month of home price increases, according to a report on the index.
Credit: CoreLogic
Also on Tuesday, the U.S. Federal Housing Finance Agency released its monthly FHFA House Price Index report. That report shows that home prices rose 0.7 percent in April compared to March.
Both the FHFA House Price Index and the S&P CoreLogic Case-Shiller Index are respected measures of U.S. home prices. Broadly speaking, they tend to highlight the same trends, though differences in methodology mean they don’t produce exactly the same numbers.
For example, the two indexes weigh differently valued homes in different ways, and the FHFA House Price Index includes reappraisals while the S&P CoreLogic Case-Shiller Index does not.
Interestingly, the two figures were in disagreement about what happened to home prices in April 2023 compared to April 2022. Year over year, the S&P CoreLogic Case-Shiller Index experienced a 0.2 percent decline in April — a drop that Hepp described as “the first annual loss since April of 2012.”
However, the report on the FHFA House Price Index states that in April prices actually rose 3.1 percent year over year. Despite that uptick, Nataliya Polkovnichenko — supervisory economist in FHFA’s Division of Research and Statistics — said that “house prices in some regions of the country continued to decline” in April.
The S&P CoreLogic Case-Shiller Index report also highlights some regional variation, with Miami seeing the biggest year-over-year price gains at 5.2 percent. Boston and Cleveland experienced the biggest month-over-month gains, at 2.9 percent and 2.3 percent, respectively.
Credit: CoreLogic
The report also reveals that month-over-month gains in many metro areas actually outpaced what was happening before the COVID-19 pandemic.
Economists generally responded to Tuesday’s new numbers with optimism. In a statement, Bright MLS Chief Economist Lisa Sturtevant suggested “a summer rebound” could be in the works thanks to “this surprisingly resilient housing market.” And she suggested, “this could be the turning point for home prices.”
Lisa Sturtevant
Sturtevant also points to high demand as a key factor in the current market.
“Rising mortgage rates were supposed to quell homebuyer demand and push home prices down,” Sturtevant said. “As rates escalated last year, buyer activity did stall. However, higher mortgage rates have not dampened buyer interest as much as many thought (or hoped) they would. As a result, while the Case-Shiller index showed a decline in April, the big home price drops some had predicted have not materialized.”
In a similar vein, George Ratiu — chief economist for real estate insights and analytics company Keeping Current Matters — said in a statement that the S&P CoreLogic Case-Shiller Index numbers “highlighted a spring housing market regaining its footing after a winter of dire forecasts.”
George Ratiu
Ratiu went on to note that demand rebounded in the spring, but that it also “ran headlong” into limited supply. That dynamic pushed prices higher and, to the surprise of some buyers, resulted in “multiple bids on well-priced properties,” Ratiu said. He added that this outcome is “an unexpected turn of events from the doom-and-gloom forecasts issued at the start of the year.”
“Real estate fundamentals remain out of balance, with demand still outpacing supply, and have a way to go toward health,” Ratiu said. But he also ultimately concluded that the “return of seasonal patterns is reinforcing the view that we are moving in a promising direction.”
Survey: Most would-be buyers (55%) know it’s a really tough market right now, but a majority (54%) still plan to maintain current goals or speed up the buying process.
CHARLOTTE, N.C. – Many hopeful homebuyers – especially those in their 40s and younger – are forging ahead with plans to buy homes despite believing the market favors sellers, according to Bank of America’s 2023 Homebuyer Insights Report.
More than half of prospective homebuyers surveyed (55%) believe the market is more competitive than last year – but just as many (54%) plan to either speed up their home purchases or buy when they originally planned.
The percentage is even greater for younger generations: 62% of Gen Z and 55% of millennials.
However, not all want-to-be buyers plan to stay in the market, at least not now. Two in five (39%) believe it’s a seller’s market, while 18% say it’s a buyer’s market and 31% say it’s neither.
Current challenges cited by buyers
High prices and interest rates (51%)
A lack of cash reserves for down payments (37%)
A low credit score (37%)
Still, nearly 40% of those prospective homebuyers said they feel more confident in their ability to buy a home today versus last year, compared to 26% who are less confident and 28% who feel about the same.
“The market is less frenzied as rates have moderated, and that may be impacting perception,” says Matt Vernon, head of retail lending at Bank of America. “And low inventory is still creating a highly competitive environment. Homebuyers are doing the right thing by taking time to understand the market, weigh their priorities and determine what fits into their budgets.”
The motivation for many buyers? Financial security. Homeownership has historically helped families build long term-wealth.
A majority (56%) of Gen Z and the same percentage of millennial homebuyers plan to purchase in the next two years – nearly on par with Gen X (58%).
Nearly half (47%) of all prospective buyers say they’d buy a home in the current housing market because they’re tired of renting and of rent increases; 28% want to start building equity.
Inactive homebuyers still curious
Even hopeful buyers waiting for the housing market to cool are forging ahead in their own way, according to the study: More than two-thirds (67%) still actively look at homes for sale, either scrolling through a real estate app (52%) and/or visiting open houses (31%).
Those scanning for homes find it to be an enjoyable pastime (41%), a way to dream about their future home (37%) and a window into how others have decorated their spaces (32%).
Beyond simply looking for inspiration, two-thirds (65%) of those who scroll through listings are interested in what their current budget would get them if they were to buy today.
NAR report cites Port St. Lucie for its homeownership rate of 83% for mid-income residents, and Ocala and Palm Bay for a Black ownership rate higher than 60%.
KANSAS CITY, Mo. – A new housing report by the National Association of Realtors® finds that middle-income homeowners accumulated $122,100 in wealth as their homes appreciated by 68% in the last 10 years.
The report, Wealth Gains by Income and Racial/Ethnic Group, speaks to the value agents and Realtors® bring to consumers when helping buy and sell homes that build generational wealth. NAR released the report during its 2023 Realtor Broker Summit.
Variations by income and race
The data found substantial variations in homeownership rates across different income and racial and ethnic groups. For instance, low-income homeowners were able to build $98,900 in wealth in the last decade from home price appreciation only, while upper-income households saw an increase of $150,800.
“This analysis shows how homeownership is a catalyst for building wealth for people from all walks of life,” says Lawrence Yun, NAR’s chief economist. “A monthly mortgage payment is often considered a forced savings account that helps homeowners build a net worth about 40 times higher than that of a renter.”
Although Black homeowners experienced the smallest wealth gains among any other racial or ethnic group, Black homeowners accumulated over $115,000 in wealth in the last decade.
For the first time, NAR also identified the top 10 U.S. metros in which Black homeowners saw the largest wealth gains and homeownership rates over the last 10 years. They include:
Bellingham, Washington
Ocala, Florida
Palm Bay, Florida
Modesto, California
Greeley, Colorado
Charleston, South Carolina
In each metro, more than 60% of Black households own their home, and those owners accumulated more than $125,000 in wealth over the last decade.
Along with the wealth gains accumulated in the last decade, homeowners also saw their debt drop by 21%. Many homeowners were able to refinance and secure a rate lower than 4% in the months following the onset of COVID-19, Yun noted.
Homeowners generally gained more equity in areas with high-cost homes. No matter the income level, owners in expensive areas saw the largest wealth gains. In the San Jose metro, for example, low-income owners accumulated nearly $630,000 in the last decade, and middle-income owners gained $643,000. All of the top 10 areas with the largest wealth gains for low-income owners – surpassing $290,000 – were located in California.
In the top 10 areas with the highest homeownership rates for middle-income households, owners gained $110,000 in wealth on average in the last 10 years. In Ogden, Utah, for example, 85% of middle-income households own their home, and they’ve built nearly $220,000 in wealth in the last decade.
Some significant areas to note include Port St. Lucie, Florida, where the homeownership rate for middle-income households was 83%, and middle-income owners gained nearly $200,000 in wealth. The cities of Barnstable Town, Massachusetts and Palm Bay, Florida, were other areas where most middle-income households both owned their home and accumulated a substantial amount of wealth – over $170,000 – in the last decade.
In the areas with the highest homeownership rates for low-income households, wealth gains were $140,000 on average. NAR includes a number of Florida cities in its list of high equity gains for lower-income households. In Prescott, Arizona, more than 2 out of 3 low-income households (68%) own their own home, and owners have built more than $200,000 in wealth in the last decade.
Barnstable Town, Massachusetts, as well as the Florida cities of North Port, Port St. Lucie, Palm Bay and Deltona were other areas where most low-income households owned their home and accumulated a substantial amount of wealth – over $120,000 – in the last decade.
At 6.32%, the average 30-year, fixed-rate mortgage declined from last week’s average 6.42% – a ray of hope for buyers seeking to secure a home this spring.
WASHINGTON – The average long-term U.S. mortgage rate inched down this week to its lowest level in six weeks, just as the spring buying season gets underway.
Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate fell for the third straight week to 6.32%, from 6.42% last week. The average rate a year ago was 4.67%.
The recent decline in mortgage rates is good news for prospective homebuyers, as many were pushed to the sidelines during the past year as the Federal Reserve cranked up its main borrowing rate nine straight times in a bid to bring down stubborn, four-decade high inflation.
Also helping buyers, home prices appear to be leveling off. The national median home price slipped 0.2% from February last year to $363,000, marking the first annual decline in 13 years, according to the National Association of Realtors.
One thing that hasn’t gotten much better is the supply of homes.
“Over the last several weeks, declining rates have brought borrowers back to the market, but as the spring home buying season gets underway, low inventory remains a key challenge for prospective buyers,” said Sam Khater, Freddie Mac’s chief economist.
Rising borrowing costs can add hundreds of dollars a month in costs for homebuyers and put the brakes on the housing market. Before surging 14.5% in February, sales of existing homes had fallen for 12 straight months to the slowest pace in more than a dozen years.
In 2022, existing U.S. home sales fell 17.8% from 2021, the weakest year for home sales since 2014 and the biggest annual decline since the housing crisis began in 2008, the National Association of Realtors reported earlier this year.
The average long-term rate hit 7.08% in the fall – a two-decade high – as the Federal Reserve quickly cranked up its key lending rate with multiple jumbo hikes in a bid to cool the economy and stymie persistent, four-decade high inflation.
In their latest quarterly economic projections, the policymakers forecast that they expect to raise that key rate just once more – from its new level of about 4.9% to 5.1%, the same peak they had projected in December.
While the Fed’s rate hikes do impact borrowing rates across the board for businesses and families, rates on 30-year mortgages usually track the moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans. Investor expectations for future inflation, global demand for U.S. Treasurys and what the Federal Reserve does with interest rates can also influence the cost of borrowing for a home.
Treasury yields have fluctuated wildly since the collapse of two mid-size U.S. banks two weeks ago. The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, was 3.57% Thursday, but had been above 4% early in March.
The rate for a 15-year mortgage, popular with those refinancing their homes, fell this week to 5.56% from 5.68% last week. It was 3.83% one year ago.
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Existing-home sales jumped 14.5% in February to a seasonally adjusted annual rate of 4.58 million, snapping a 12-month slide and representing the largest monthly percentage increase since July 2020 (+22.4%). Compared to one year ago, however, sales retreated 22.6%.
The median existing-home sales price decreased 0.2% from the previous year to $363,000.
The inventory of unsold existing homes was unchanged from the prior month at 980,000 at the end of February, or the equivalent of 2.6 months’ supply at the current monthly sales pace.
WASHINGTON (March 21, 2023) – Existing-home sales reversed a 12-month slide in February, registering the largest monthly percentage increase since July 2020, according to the National Association of REALTORS®. Month-over-month sales rose in all four major U.S. regions. All regions posted year-over-year declines.
Total existing-home sales,1https://www.nar.realtor/existing-home-sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – vaulted 14.5% from January to a seasonally adjusted annual rate of 4.58 million in February. Year-over-year, sales fell 22.6% (down from 5.92 million in February 2022).
“Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said NAR Chief Economist Lawrence Yun. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.”
Total housing inventory2 registered at the end of February was 980,000 units, identical to January and up 15.3% from one year ago (850,000). Unsold inventory sits at a 2.6-month supply at the current sales pace, down 10.3% from January but up from 1.7 months in February 2022.
“Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.”
The median existing-home price3 for all housing types in February was $363,000, a decline of 0.2% from February 2022 ($363,700), as prices climbed in the Midwest and South yet waned in the Northeast and West. This ends a streak of 131 consecutive months of year-over-year increases, the longest on record.
Properties typically remained on the market for 34 days in February, up from 33 days in January and 18 days in February 2022. Fifty-seven percent of homes sold in February were on the market for less than a month.
First-time buyers were responsible for 27% of sales in February, down from 31% in January and 29% in February 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 20224 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 28% of transactions in February, down from 29% in January but up from 25% in February 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 18% of homes in February, up from 16% in January but down from 19% in February 2022.
Distressed sales5 – foreclosures and short sales – represented 2% of sales in February, nearly identical to last month and one year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage(link is external) averaged 6.60% as of March 16. That’s down from 6.73% from the previous week but up from 4.16% one year ago.
The median listing price grew by 6.3% over last year. Growth in the typical asking price of for-sale homes moved lower after a slight uptick last week’s pace, once again hitting a new low since June 2020, when the housing market was beginning to bounce back from the initial pandemic shock. While the housing market had shown some signs of stabilizing, a renewed climb in mortgage rates could undermine the recovery. With the Fed signaling that higher rates for longer may be necessary to tame inflation, all eyes are focused on their March statement and clues on how their view of the future has evolved.
New listings–a measure of sellers putting homes up for sale–were again down, this week by 26% from one year ago. For 35 weeks now, fewer homeowners put their homes on the market for sale than at this time one year ago. Until this week, the gap was slightly smaller than we saw in the last quarter of 2022. In February, attitudes toward housing worsened among both potential buyers and potential sellers as mortgage rates began to climb again and respondents reported lower job security. These attitudes could mean ongoing weakness in the number of homeowners deciding to sell.
Active inventory growth continued to climb with for-sale homes up 61% above one year ago. Inventories of for-sale homes rose again, but the gain was the lowest we’ve seen since December. With new listings lagging behind year-ago pace, the growing number of homes for sale reflects longer time on market rather than an influx of sellers. It’s also important to remember that this year over year comparison is relative to early 2022, when active listings were at or near long-term lows. Even after these huge year over year gains, February data show that nationwide there are only just more than half as many homes for sale as were available pre-pandemic (-47%).
Homes spent 18 extra days on the market compared to this time last year. For 31 weeks, homes on the market have been for-sale longer than was typical one year ago. After rising steadily from summer 2022, the gap surged early in 2023, surpassing the 3 week mark in mid-February. This week, however, marks the third week that the gap has shrunk even as new listings remain scarce, suggesting that buyers are active in the market, even if they are not as numerous as this time last year. Our February Housing Trends Report helps put these changes into context. Even though the median home listing was on the market for 67 days, 23 days longer than this time last year, this still trailed the pre-pandemic average for February by a nearly equal amount (20 days). In other words, using time on market as a guide, today’s housing market is halfway between its most frenetic period one year ago and what was typical before the pandemic-era frenzy. This means that the market has room to adjust in either direction, and mortgage rates will likely play a strong role in determining whether the market slows further or picks up speed.
Spring is around the corner, and the signs are pointing to a pick-up in sales on the horizon. Read more from NAR’s latest housing report.
Existing-home sales continued to ease in January, marking a yearlong stretch of declines coming off pandemic-fueled highs. But median home prices still are rising.
Total existing-home sales—completed transactions that include single-family homes, townhomes, condos and co-ops—decreased 0.7% in January compared to December 2022, the National Association of REALTORS® reported Tuesday. Home sales are down nearly 37% compared to a year earlier (at a seasonally adjusted annual rate of 4 million in January).
But as mortgage rates begin to stabilize, economists are hopeful for a turnaround in sales activity for the housing market heading into spring.
“Home sales are bottoming out,” says Lawrence Yun, NAR’s chief economist. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Overall, the median existing-home sales price nationwide rose 1.3% compared to a year ago, reaching $359,000, NAR reports. Home prices climbed in three out of the four major regions of the U.S., only falling in the West last month.
The supply of homes for sale continues to be tight in most markets across the country, helping to keep home prices higher. Still, total housing inventory rose 2.1% in January month-over-month and is up by 15.3% compared to a year ago. Unsold inventory, remains, at a brisk, 2.9-month supply at the current sales pace.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun says. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
Here’s a closer look at other key indicators from NAR’s latest housing report: Days on the market: Fifty-four percent of homes sold in January were on the market for less than a month in January. On average, properties remained on the market for 33 days in January, up from 26 days in December and 19 days a year earlier. First-time home buyers: As competition lessens, first-time home buyers are re-emerging. First-time buyers accounted for 31% of sales in January, up from 27% a year earlier. All-cash sales: All-cash transactions comprised 29% of sales in January, up from 27% in January 2022. Individual investors and second-home buyers tend to make up the biggest bulk of all-cash sales. They purchased 16% of homes in January, down from 22% a year earlier. Distressed sales: Foreclosures and short sales continue to make up a very small share of sales. Distressed sales accounted for 1% of sales in January, matching levels from a year earlier.
Regional Snapshot Here’s how existing-home sales fared across the country in January:
Northeast: Existing-home sales fell 3.8% from December, reaching an annual rate of 500,000 in January. Sales were down nearly 36% from a year earlier. Median price: $383,000, up 0.3% from January 2022
Midwest: Sales decreased 5% compared to the previous month, reaching an annual rate of 960,000 in January. Sales were down 33.3% from one year ago. Median price: $252,300, up 2.7% from January 2022
South: Sales rose 1.1% in January compared to December, reaching an annual rate of 1.82 million. Sales are down nearly 37% from the prior year. Median price: $332,500, an increase of 3.4% from one year ago
West: Existing-home sales increased 2.9% in January, reaching an annual rate of 720,000, but still down 42.4% from the previous year. Median price: $525,200, down 4.6% from January 2022
This week, Chief Economist Danielle Hale discusses what small business optimism, consumer and producer inflation data, and retail sales data signal about the U.S. economy. She also highlights what these data imply for the Fed’s likely path forward.
0:10 – Business optimism trends 0:25 – Inflation trends 1:24 – Mortgage rates 1:40 – Construction trends 2:11 – Real estate listings trends
