Existing Home Sales Cool, but Still Health

This article was posted on August 22, 2022

Existing Home Sales Cool, but Still Healthy

Existing Home Sales Housing Report

The National Association of Realtors (NAR) released their Existing Home Sales housing report and it showed that closings on existing homes were down 1.5% in the month of September. Even though this was slightly stronger than expectations of down 1.7% it was still a decline. Year over year existing home sales were down 23.8%.

September 2022 Home Supply

During the month of September there was a 3.2-month supply of homes which is still very tight. A six-month supply is seen as healthy and balanced. Digging deeper into the supply portion of this report, 41% of the housing inventory were already noted as under contract and not available. This leaves about only 732,000 active homes. So, when looking at the month’s supply of active homes that are available for sale. It is only about 1.9 months.
Lawrence Yun, the NAR Chief Economist said, “Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” Yun added. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.”

Home Listing Market Average

Average amount of days a home sat on the market increased from 16 days to 19 days. Even though they are sitting longer, if they are priced more realistically or more correctly, they are still selling at a fast pace. 70% of homes were on the market for less than 30 days.
First time home buyers accounted for 29% of sales, cash buyers made up 22% of sales, and investors made up 15% of sales.

Overall, there is certainly a cooling in the housing market, but it is evident that it is staying in a healthy zone. Home values are not depreciating just normalizing even with interest rates on the rise. Even Redfin just mentioned that demand is slumping due to surging mortgage rates, but prices are being propped up by inflation and a drop in the number of people putting their homes up for sale or a lack of supply.

Source: https://www.nar.realtor/newsroom/existing-home-sales-decreased-1-5-in-september

Existing Home Sales Cool, but Still Health