Reports on a cooling housing market are everywhere. And numbers from June 2022 all show the same thing: a decline in home sales.
Let’s break down the reports from the National Association of Realtors and the U.S. Census Bureau.
In June 2022, pending home sales decreased 8.6% when compared to May 2022. And when compared to pending sales in June 2021, this year’s transactions dropped by 20%.
It’s no surprise that buyers are becoming more hesitant to make offers. With high mortgage rates and listing prices, buying a property is about 80% more expensive than in June 2019. But, according to NAR Chief Economist Lawrence Yun, pending contracts will begin to stabilize once mortgage rates reach their cyclical high.
“Home sales will be down by 13% in 2022, according to our latest projection. With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023.
Existing Home Sales
Closed sales also took a hit in June, with a 5.4% decrease from May 2022, and 14.2% decline from June 2021.
Source: National Association of Realtors
Even with a decrease in home sales, the median existing home price increased to a record high of $416,000. This is a 13.4% increase year-over-year. Inventory also increased—by 9.6% from May 2022.
New Home Sales
New home sales reached a two-year low in June, which speaks to plummeting homebuilder sentiment.
New single-family home sales declined by 8.1% from May 2022, according to data from the U.S. Census Bureau. Compared to June 2021, new home sales decreased by 17.4%. Similar to existing home sales, the median sale price of new homes continued to increase—from $390,500 in June 2021 to $402,400 in June 2022.
This has caused homebuilders to pull back from construction, even though the housing supply remains low.
Outlook for August 2022
With a drop in pending sales in June, home sales will continue to slow in August. Some experts welcome this shift in the market, which was on a rapid acceleration over the past two years.
Buyers and sellers, on the other hand, continue to fear headlines of high mortgage rates and a market slowdown. Knowing how to shift your plays as an agent is essential to helping consumers in this new market.