Existing home sales continue to slide amid supply shortage, steep mortgage rates

foxbusiness.com:

Serhant Associate Broker Nile Lundgren weighs in on the middle-class getting priced out of home ownership.

U.S. existing home sales continued to slide in July as a combination of steep mortgage rates and a worsening supply shortage squeezed would-be homebuyers. 

Sales of previously owned homes tumbled 2.2% in July from the previous month to an annual rate of 4.07 million units, according to new data released Tuesday by the National Association of Realtors (NAR). On an annual basis, existing home sales are down 16.6% when compared with July 2022. 

«Two factors are driving current sales activity – inventory availability and mortgage rates,» said Lawrence Yun, chief economist at NAR. «Unfortunately, both have been unfavorable to buyers.»

There were about 1.11 million homes for sale at the end of July, according to the report, up about 3.7% the previous month but down 14.6% from one year ago. 

COMMERCIAL REAL ESTATE CRASH STILL LOOMING OVER US ECONOMY

A house is for sale in Arlington, Virginia, on July 13, 2023. (SAUL LOEB/AFP via Getty Images / Getty Images)

Over the past year, limited inventory has buoyed consumer demand. Homes sold on average in just 20 days last month. While that is down slightly from the 14 days recorded in July 2022, it marks a major increase from prior years. Before the COVID-19 pandemic, homes typically sat on the market for about a month before being sold.

At the current pace of sales, it would take roughly 3.3 months to exhaust the inventory of existing homes. Experts view a pace of six to seven months as a healthy level. 

MORTGAGE CALCULATOR: SEE HOW MUCH HIGHER RATES COULD COST YOU

The median price of an existing home sold in July was about $406,700. While that is down slightly from the