Let’s put it simply: The total number of active listings nationwide remains below 2019 levels, with fewer than 30 days currently on the market. Existing home sales haven’t plummeted as much as they did in 2022, when we saw home prices fall in the second half of 2022.
from Nar: Sales of existing homes fell 0.7% in May to a seasonally adjusted annual rate of 4.11 million units. Sales fell 2.8% from a year ago. The median sales price of an existing home rose 5.8% from May 2023 to $419,300, the highest price on record and the eleventh consecutive month of year-over-year price increases. As of the end of May, unsold existing housing inventory increased by 6.7% from the previous quarter to 1.28 million units, which is equivalent to 3.7 months of supply based on the sales rate that month.
Below are four charts showing the data for NAR mentioned above.
existing home sales
When mortgage rates began to rise earlier this year, existing home sales were trending downward. I believed this to be the case, so much so that I wrote that the February report was likely to be the seasonal monthly peak in home sales this year. Just like in 2023, higher interest rates are holding back sales numbers. However, what makes this year different from 2023 is that we have more sellers who will become buyers. As you can see in our new listing profile, we are showing growth.
This means our weekly contracts for sale data shows year-on-year growth. Nothing spectacular, but still growing. However, if mortgage rates fell and stayed low, everyone would be selling more homes today.
Home prices and inventory
Of course, if you follow our weekly tracking data, you know that inventories have been building this year. Existing home sales data is catching up to our data, which to me is the best story for the 2024 housing market because when the housing market is seriously unhealthy in 2022, the NAR active listings total is below mega.
Also, days on market are in the teens and nothing good happens when days on market are in the teens or less because it means we either have a lot of credit sales or there are just too many people chasing Too few houses. Of course, the real estate market isn’t experiencing the same boom in credit sales as it was in 2002 to 2005, but there’s also a lack of inventory.
As you can see in the weekly data below, inventories are growing at a healthy rate this year. A little too slow for me, but adequate.
Home prices are rising nationwide as inventory levels remain below 2019 levels in much of the country and home sales are no longer falling sharply. However, year-on-year data will cool down going forward. We’ve been working on extremely low prices for the past two months as last year’s data showed median house prices falling year over year. So the bar has been low, but it won’t be low for the rest of the year, which will cool down the year-over-year price data. In addition, inventory and price reduction percentage data also improved after March.
All in all, there’s nothing too surprising about today’s exciting home sales report. Mortgage rates have dropped recently, and last week was the first week in a row that we saw increases in purchase application data. We’ll see if the momentum continues next week.
As I always emphasize, tracking the latest weekly data line on the weekend tracker (which takes into account many housing variables) means you won’t be surprised when the existing home sales report comes out. Look for this tracking article every Saturday to keep you informed of what’s happening right now.
