Home sales fall in July; some see silver lining
LOS ANGELES — The housing market’s comedown from its high-flying days early this year is deepening, with home sales in July falling for the sixth straight month.
Sharply higher mortgage rates, surging inflation and prices that remain near alltime highs are making homes less affordable. Sales fell 20.2% from July last year, reaching the slowest pace since May 2020, near the start of the pandemic.
But the slowdown has begun to tip the homebuying equation, if ever so slightly, in favor of house hunters who can afford to stay in the market, and away from sellers, who’d previously been able to offload their homes at prices they may have never dreamed of.
Homes are still selling lightning fast, on average, and many continue to fetch multiple offers. But many sellers have had to become more flexible on their asking price and find they no longer can demand would-be buyers waive important safeguards like a home inspection before closing the deal.
The shift doesn’t mean it’s a buyer’s market now — it’ll take a sharp increase in the number of homes on the market before that happens. Still, it is a notable reversal after a housing shortage, rock-bottom mortgage rates and soaring home prices skewed the housing market strongly in sellers’ favor in recent years.
“We know that homes are taking longer to sell, sellers are having to price more carefully and are having to adjust if they’re not priced competitively,” said Danielle Hale, chief economist for Realtor.com. “So, it’s moving in a buyer-friendly direction, but I’m not sure it’s quite there yet.”
New data show somewhat of a mixed picture of the housing market. The National Association of Realtors said Thursday that existing home sales fell 5.9% last month from June to a seasonally adjusted annual rate of 4.81 million.
Despite the softer market, many sellers are still entertaining several offers. A typical home received 2.8 offers last month, though that’s down from 4.5 offers a year earlier, NAR said.
Nicholas Brooks and Nathan Giddings put their four-bedroom, 2.5-bath house in Flower Mound, Texas, roughly 20 miles northwest of Dallas, on the market in early June for $575,000 and got several offers. They ended up accepting a $645,000 bid, but it fell apart soon after. The couple, which now live in Portland, Maine, relisted the house a few weeks later, but ended up accepting a $615,000 offer.
“We started super-optimistic, we got a ton of offers over asking and then clearly a month later it was a couple of offers and much less,” said Brooks, a systems analyst. “We definitely thought if we left it on the market the offers would get lower and lower.”