Blog: A Snapshot of the U.S. Existing Home Sales Market

 The U.S. housing market continues to show signs of fluctuation, with mixed signals coming from both monthly and annual data on existing home sales. The data, which includes metrics on sales, inventory, and pricing, reveals a market in transition.

Key Observations:

1. Sales Decline:

   • Existing home sales dropped by 2.53% in the past month, while single-family home sales saw a sharper monthly decline of 2.79%.
   • On an annual basis, both existing home sales and single-family home sales have fallen by 4.22% and 3.33% respectively. These declines indicate that the broader market is slowing down, likely influenced by high interest rates and economic uncertainty.

2. Housing Inventory on the Rise:

   • Inventory levels have shown a slight monthly increase for existing homes at 0.75%, with no significant change for single-family homes.
   • However, on a yearly basis, the housing inventory has surged significantly. Existing home inventory increased by 22.73%, and single-family home inventory by 21.65%. This rise in inventory could ease the supply constraints that have fueled competition in recent years.

3. Price Stabilization:

   • The median sales price for existing homes decreased by 1.12% month-over-month but is still up by 3.09% year-over-year.
   • Single-family homes followed a similar trend with a 1.19% monthly decline and a 2.90% annual increase in median price. This suggests that while prices are cooling off slightly, they remain higher than pre-pandemic levels.

4. Months of Supply Growing:

   • The months' supply of existing homes increased by 2.44% in the last month and by 27.27% compared to last year.
   • Single-family homes saw an even larger annual rise in supply, with a 28.13% increase. This indicates a shift towards a more balanced market, with more homes available for buyers to choose from.

Conclusion:

The U.S. housing market is entering a phase of correction, marked by declining sales, increasing inventory, and stabilizing prices. The rise in housing supply offers potential opportunities for buyers, but the challenges of high mortgage rates and elevated prices remain significant hurdles. As we move forward, the future direction of the market will depend heavily on economic conditions, interest rates, and housing policies.