Existing Home Sales Surprisingly Strong!

We received data for existing home sales in June, and the numbers are worth taking a look at. Obviously, this is a report that comes out every month – and we’ve been paying more attention to it than usual. There’s no question that things are slowing down, there’s no argument to that fact!

But it’s interesting to peel back the layers and see how the market is doing. These numbers represent closings in June, which means that these buyers were looking at homes and going under contract in May (then closing in June). By May, we were already seeing peak interest rates, and have come down a little since then.

So, these numbers are reflective of the rates that we are seeing today, which are much higher than what we had at the beginning of the year. The higher interest rates are fully reflected in this data.

Current Statistics in the Real Estate Market

Here are a few interesting talking points from this recent report:

• You can see that the numbers annualized for the whole year are down by 5.4% month-over-month and down by 14.2% year over year. Sales are down.
• Median home prices are up again, year-over-year. I’m sort of surprised by this number, because I would have thought that it would be flattening by now.
• First time homebuyers are really hanging in there. We’re also seeing that cash buyers and investors are staying strong compared to last year.
• Inventory jumps out at me: there are 1.26 million units available for sale. Compare this to the last “bubble” – that number was in the 4 million range at the time (triple the number of homes for sale back then vs. now). Yes, things are slowing down, but we don’t see a big glut of inventory.
• Less than 1% of all transactions are foreclosures or short sales, which speaks to the health of the market.

There is so much talk in the media with a “sky is falling” mentality. There’s no disputing that the market has changed significantly, but I don’t think things are about to burst. We’ll see what happens in the months to come.

If you want to see more information about this topic (one of the sources where I got my information, check out this other video:

The Real Estate Market is Resilient

But these numbers don’t look like a market that is a bursting bubble. For now, I think the market is still be resilient. Time will tell!

I’m always here to answer your mortgage questions. Reach out if you want to explore options for your personal situation.