Existing home sales in the U.S. slumped by much more than expected in the month of July, according to a report released by the Commerce Department on Tuesday.
NAR said existing home sales tumbled by 2.2 percent to an annual rate of 4.07 million in July after plunging by 3.3 percent to an annual rate of 4.16 million in June. Economists had expected existing home sales to edge down to an annual rate of 4.15 million.
Existing home sales decreased for the fourth time in the past five months, falling to their lowest annual rate since hitting 4.00 million in January.
“Two factors are driving current sales activity – inventory availability and mortgage rates,” said NAR Chief Economist Lawrence Yun. “Unfortunately, both have been unfavorable to buyers.”
The report said housing inventory at the end of July was 1.11 million units, up 3.7 percent from June 1.07 million units in June but down 14.6 percent from 1.30 million units a year ago.
The unsold inventory represents 3.3 months of supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022.
NAR said the median existing-home price was $406,700 in July, an increase of 1.9 percent from $399,000 in the same month a year ago.
“Most homeowners continue to enjoy large wealth gains from recent years with little concern about home price declines,” Yun said. “However, many renters are concerned as they’re facing growing affordability challenges because of high interest rates.”
The report said single-family home sales slumped 1.9 percent to an annual rate of 3.65 million in July, while existing condominium and co-op sales plunged by 4.5 percent to an annual rate of 420,000.
On Wednesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of July.
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