The Usa Real Estate Market Down in June 2024, with sales of previously occupied homes dropping 5.4% from May to a seasonally adjusted annual rate of 3.89 million. This marks the fourth consecutive month of declines, according to the National Association of Realtors (NAR). The latest figures underscore the ongoing challenges faced by the housing market amid elevated mortgage rates and record-high prices.
Sales Decline: Home sales were down 5.4% compared to June of the previous year, falling short of the 3.99 million annual pace economists had anticipated. This trend highlights the persistent struggles in the housing sector.
Rising Prices: Despite the decline in sales, home prices continued to climb, reaching a national median sales price of $426,900, a 4.1% increase from a year earlier. This marks the 12th consecutive month of price increases and sets an all-time high with records dating back to 1999.
Inventory Increase: The supply of homes on the market increased to its highest level since May 2020, with about 1.32 million unsold homes at the end of June. This represents a 3.1% increase from May and a 23% increase from June last year, translating to a 4.1-month supply at the current sales pace.
Market Shift: The recent increase in inventory suggests a potential shift from a sellers' market to a buyers' market, as indicated by NAR's chief economist, Lawrence Yun. However, sellers still benefit from the tight housing market, with homes typically selling within 22 days of hitting the market.
Mortgage Rates Impact: The housing slump, which began in 2022, has been exacerbated by rising mortgage rates. The average rate on a 30-year mortgage surged to a 23-year high of 7.79% last year and has hovered around 7% this year. This has discouraged many potential buyers and sellers, particularly those locked into lower fixed-rate mortgages.
First-Time Buyers: First-time homebuyers accounted for 29% of all sales last month, down from 31% in May but up from 27% in June last year. Historically, first-time buyers have accounted for 40% of sales.
Cash Buyers and Investors: Homebuyers paying all cash accounted for 28% of sales last month, up from 26% a year earlier. Individual investors and those buying second homes accounted for 16% of sales, down from 18% a year earlier.
The housing market's future depends largely on mortgage rate trends. Recent signs of cooling inflation have raised expectations that the Federal Reserve might cut its benchmark rate in September. If bond yields decline in anticipation of this rate cut, mortgage rates could ease, potentially reviving the housing market. However, most economists expect the average rate on a 30-year home loan to remain above 6% this year, posing continued challenges for homebuyers and sellers.
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