June Sales of Existing Homes Drop
After hitting its highest in three-and-a-half years in May, sales of existing homes drop in June by 1.2 percent to a 5.08 million annual rate. This was from 5.14 million in May.
Still, despite the sudden decrease in sales, the volume remains 15.2 percent higher than on the same month last year.
This was an expected result of the rising mortgage rates. While many affordable homes are still available in the market, buyers, especially those who are just now entering the market, are seeing themselves priced out and burdened not only by the mortgage rates but overhead costs associated with loan application as well.
There is still a large demand for homes but high-cost areas, like New York, Hawaii, and California, are feeling a dent in the sales volume this month.
Another factor is the ever-looming inventory situation. While sales are being affected by the mortgage increase, many buyers who are looking for affordable homes often find listings insufficient and even lacking. It is undeniable that many areas of the country are experiencing a seller’s market.
Due to the shortage, the median home value soared 13.5 percent from June of last year, to $214,200. This was the 16th consecutive month increase posted.
Further, the slowly easing foreclosure market is helping pump home price gains. All across the country, foreclosures are again entering the market. Those which have been in the backlogs are coming onto the auction block. The sales of foreclosures accounted for 15 percent in June while 18 percent last month.