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As home prices continued their climb, the number of existing-home sales continued to decline, indicating that buyers may be reaching their limits.
In June, prices of these previously lived-in abodes hit another all-time high of a median $276,900, according to the most recent National Association of Realtors® report. That was up 4.45% from May and 5.2% from June 2017. Combine those price increases with rising mortgage rates, and that makes it hard for many would-be buyers to get into the market or trade up into larger homes.
Buyers closed on 5.38 million existing homes—down 0.6% from May and 2.2% from the same month a year earlier. (Realtor.com® looked only at the seasonally adjusted numbers in the report. These have been smoothed out over 12 months to account for seasonal fluctuation.)
“June is usually the peak month for closings in the year,” says Chief Economist Danielle Hale of realtor.com. “Some people have no choice but [to] wait until either prices come down or builders start building more affordable homes.”
Sales of single-family homes also dipped in June—a surprise, since those homes are typically in demand by families with children, who look for houses during the summer break. Closings fell 0.6% from the previous month and 2.3% from the previous year.
High prices and a lack of homes on the market are the likely culprits. The median single-family home price hit $279,300. That’s a 5.2% rise from just a year ago.
Meanwhile, condo and co-op sales were flat from May and down about 1.6% from last year. Prices hit a median $258,100—up 4.9% from last year.
“There are a lot of buyers and not enough homes,” says Hale. “It’s pushing prices up.”
Sales fell the most in the ultraexpensive West, which includes Silicon Valley and San Francisco, to about 1.14 million. They dipped 2.6% from May and 5% from June 2017. The median home price was $417,400 in the region.
Sales also tumbled in the South, by 2.2% month over month. But they were up 0.4% year over year. The median home price was $237,500 for the 2.25 million sales.
In the Midwest, where prices were the lowest, the number of sales ticked up 0.8%, to a total of 1.27 million from the previous month. But they were down 3.1% from the previous year. The median home price was $218,800.
Meanwhile, the number of closings, 720,000, jumped in the Northeast, rising 5.9% over May. However, they dropped 4% from June 2017. The median home price was $305,900.
“The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market,” says Lawrence Yun, chief economist of the NAR. “What is for sale in most areas is going under contract very fast and, in many cases, has multiple offers.”
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