Sales of existing homes have fallen for a sixth straight month and are now at the lowest level since early in the pandemic.
Existing-home sales tumbled by 5.9% in July to a seasonally adjusted annual rate of 4.81 million, according to a report by the National Association of Realtors released Thursday. Sales were down a hefty 20.2% from a year ago.
The NAR said the median existing-home sales price declined from the previous month to $403,800 but is still up 10.8% for the 12 months ending in July. The hike marks 125 consecutive months of year-over-year price increases, the longest recorded streak.
“We're witnessing a housing recession in terms of declining home sales and homebuilding,” said NAR Chief Economist Lawrence Yun. “However, it's not a recession in home prices. Inventory remains tight, and prices continue to rise nationally with nearly 40% of homes still commanding the full list price.”
Mortgage rates rose quickly over the past few months as the Federal Reserve conducted aggressive interest rate hikes to curb inflation, but they have since moderated a bit in response to fears that the economy has begun slowing down and could enter into a recession.
As of Thursday, the average 30-year fixed-rate mortgage was 5.13%, up more than 2.6 percentage points from a year before, according to Freddie Mac. Last month, the Fed announced it would jack up its target interest rate (which is a different, very short-term rate) once again by an aggressive two-thirds of a percentage point. Mortgage rates peaked at 5.81% in June.
The Fed is expected to conduct another massive interest rate hike next month, although the question is whether it will be a 50 basis point hike or another aggressive 75 basis point hike.
In other housing news, housing starts, which measure the annualized change in the number of new residential buildings that began construction, declined by a weighty 9.6% last month to a 1.45 million annualized rate after posting slight gains in June.
Additionally, the housing market index released Monday by the National Association of Home Builders and Wells Fargo found that builders' confidence in the market for new single-family homes sunk 6 percentage points this month to fall into negative territory for the first time since a brief period at the start of the pandemic.
