June Home Sales Drop To The Slowest Pace In 14 Years As Short Supply Chokes The Market  

• Sales of pre-owned homes dropped 3.3% in June compared with May, running at a seasonally adjusted annualized rate of 4.16 million units, according to the National Association of Realtors. Compared with June of last year, sales were 18.9% lower. That is the slowest sales pace for June since 2009.
• The continued weakness in the housing market is not for lack of demand. It’s all about a critical shortage of supply. There were just 1.08 million homes for sale at the end of June, 13.6% less than in June of 2022. At the current sales pace, that represents a 3.1-month supply. A six-month supply is considered balanced between buyer and seller.
• “There are simply not enough homes for sale,” said Lawrence Yun, chief economist for the Realtors. “The market can easily absorb a doubling of inventory.” That dynamic is keeping pressure on home prices. The median price of an existing home sold in June was $410,200, the second-highest price ever recorded by the Realtors. Last June’s price was the highest but by barely 1%.
• Sales are unlikely to recover anytime soon, as mortgage rates weigh heavy on affordability. The Realtors measure June sales based on closings, so contracts that were likely signed in April and May. Mortgage rates hung in the mid-6 % range during that time and then shot up over 7% at the very end of May. Rates stayed in the 7% range for all of June, as home prices rose.

(Source: CNBC)