NAR: Existing-Home Sales Decreased to 4.07 million SAAR in July

Median Prices Increased 1.9% YoY in July

From the NAR: Existing-Home Sales Slipped 2.2% in July

Existing-home sales receded in July, according to the National Association of Realtors®. Among the four major U.S. regions, sales grew in the West but faded in the Northeast, Midwest and South. All four regions registered year-over-year sales declines.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – waned 2.2% from June to a seasonally adjusted annual rate of 4.07 million in July. Year-over-year, sales slumped 16.6% (down from 4.88 million in July 2022).
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Total housing inventory registered at the end of July was 1.11 million units, up 3.7% from June but down 14.6% from one year ago (1.3 million). Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 3.1 months in June and 3.2 months in July 2022.
emphasis added

The sales rate was below the consensus forecast, but at housing economist Tom Lawler’s estimate.

Sales in July (4.07 million SAAR) were down 2.2% from the previous month and were 16.6% below the July 2022 sales rate.

Sales Year-over-Year and Not Seasonally Adjusted (NSA)

The second graph shows existing home sales by month for 2022 and 2023.

Sales declined 16.6% year-over-year compared to June 2022. This was the twenty-third consecutive month with sales down year-over-year. Since sales were declining all year in 2022, the year-over-year declines are getting smaller - even though sales declined over the last 6 months.

The third graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), for a few selected periods. Black and light Purple are the maximum sales per month during the bubble (2005) and the minimum sales during the bust (2008 - 2011). The most recent five years are shown (2019 through 2023).

Sales NSA in July (372,000) were 18.1% below sales in July 2022 (454,000). On an NSA basis for the month of July, sales were 12.4% above the record low for July during the housing bust (331,000 in July 2010).

This decrease in sales, NSA, was slightly larger than the change in the markets I track each month.

Housing Inventory Increased in July

The fourth graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.11 million in July up from 1.08 million in June.

Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The fifth graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory was down 14.6% year-over-year (blue) in July compared to July 2022. Months of supply (red) increased to 3.3 months in July from 3.1 months in June.

Median House Prices Declined 0.9% Year-over-Year

On prices, the NAR reported:

The median existing-home price for all housing types in July was $406,700, an increase of 1.9% from July 2022 ($399,000). Prices rose in the Northeast, Midwest and South but were unchanged in the West.

Median prices are distorted by the mix (repeat sales indexes like Case-Shiller and FHFA are probably better for measuring prices).

The YoY change in the median price peaked at 25.2% in May 2021 and bottomed at down 3.0% in May 2023. Prices are now up 1.9% YoY. Median house prices decreased 0.8% from June to July and are down 1.7% from the peak in June 2022 (NSA).

The median price tends to lead the Case-Shiller index, and this is further evidence that Case-Shiller will likely turn positive year-over-year soon.

Note that closed sales in July were mostly for contracts signed in May and June. Mortgage rates, according to the Freddie Mac PMMS, averaged around 6.4% in May and 6.7% in June. August sales will be mostly for contracts signed in June and July, mortgage rates averaged 6.9% in July, so seasonally adjusted closed sales will likely be less in August compared to July.

The recent surge in mortgage rates over 7% will impact closed sales in September, and it now seems likely that in a few months existing home sales will fall below the previous cycle low of 4.00 million in January 2023.