Home Sales Had Their Worst June in 25 Years. But a Buyer’s Market May Be Coming.

Home sales fell in June to 3.89 million. Brandon Bell/Getty Images

Existing-home sales notched their worst June in at least 25 years as prices rose and high costs kept buyers on the sidelines, capping off a dismal spring season. And yet, rising inventory is a silver lining for buyers.

Existing-home sales in June fell to a lower-than-expected seasonally adjusted annual rate of 3.89 million, the National Association of Realtors said Tuesday, lower than the 3.99 million economists had expected, according to FactSet consensus estimates. It was the lowest seasonally-adjusted level since December, and the slowest June since at least 1999, when the trade group began reporting existing-home sales figures.

At June’s pace, it would take 4.1 months to sell through every unit on the market—the highest level in over four years, National Association of Realtors Chief Economist Lawrence Yun said. “We’re seeing a slow shift from a seller’s market to a buyer’s market,” he said in a statement.

But the market isn’t there yet, Yun said on a conference call, referencing record high sale prices. Prices rose to $426,900, the trade group said, up 4.1% from one year prior. “Even as the median home price reached a record high, further large accelerations are unlikely,” Yun said in the statement, adding that supply and demand conditions are balancing out.

Home sales are still low, but conditions show early signs of improving for buyers. Mortgage rates have come down in recent weeks as markets have grown more optimistic for Federal Reserve rate cuts. And increasing inventory will likely take some of the pressure off price gains.

Buyers still hunting for a home could have more luck than in the pandemic’s early days, when homes seldom sat on the market and drew heavy competition. “Homes are sitting on the market a bit longer, and sellers are receiving fewer offers,” Yun said. “More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”

Via Mansion Global