Lawrence Yun Archives - World Today News

Here’s a breakdown of the provided text, focusing on the key information about the US housing market:

Key Takeaways:

Home Sales Decline: Sales of previously owned homes in June fell 2.7% from May to 3.93 million units (seasonally adjusted, annualized basis). This was a larger drop than analysts expected.
Stagnant Year-over-Year: Sales were unchanged compared to June 2024.
Impact of High Mortgage Rates: The primary driver for the slowdown is high mortgage rates, which have been consistently above 6.8% and have jumped above 7% multiple times. Lawrence Yun, chief economist for the NAR, states that if rates dropped to 6%, it could lead to an additional 160,000 renters becoming homeowners and boost sales from existing homeowners.
Stubbornly High Rates: Mortgage rates have remained high for months, averaging 6.77% currently, due to broader economic concerns.
Increasing Supply: The supply of homes for sale increased by 15.9% year over year, reaching 1.53 million units. This represents a 4.7-month supply, which is still considered lean (a balanced market is a 6-month supply).
Record High Median Price: The median home price in June was $435,300, up 2% year over year and a record high for the month of June. This marks the 24th consecutive month of annual price increases. Undersupply driving Prices: The sustained high home prices are attributed to years of undersupply, with home construction not keeping pace with population growth.
Higher-End Market Outperforms:
Homes priced below $100,000 dropped 5% annually.
Homes priced between $100,000 and $250,000 rose 5%.
Homes priced above $1 million jumped 14%.
Longer Time on Market: Houses are taking longer to sell,averaging 27 days in June compared to 22 days in June 2024. Higher-end homes are selling faster than those below $500,000.
First-Time Buyer Lag: First-time buyers accounted for only 30% of sales, considerably lower than the historical average of 40%.
Elevated Cash Sales: All-cash deals remain high at 29% of sales, compared to roughly 20% pre-Covid.
* Fewer Offers: Homes received an average of 2.4 offers, down from 2.5 last month and 2.9 a year earlier.

In essence, the US housing market is experiencing a slowdown in sales due to high mortgage rates, despite a growing supply and record-high median prices driven by persistent undersupply. The higher end of the market is performing better, while first-time buyers are struggling to enter the market.

Housing Market Sees Little change as Mortgage Rates hover Near 7%

The U.S. housing market is experiencing a period of stagnation, with home sales and prices showing minimal fluctuation as average 30-year mortgage rates remain anchored close to 7%.This stability, or lack of significant movement, is largely attributed to the persistent affordability challenges that continue to sideline many potential first-time homebuyers.

Homes that went under contract in May and June, the period influencing last monthS sales, were subject to average 30-year mortgage rates that ranged between 6.76% and 6.89%. According to mortgage buyer Freddie Mac, these rates have been remarkably consistent. Experts suggest that a notable increase in home sales would likely require a more significant drop in mortgage rates. For instance, an estimated fall to 6% could stimulate sales by an additional half-million homes.

The current market conditions are notably impacting aspiring first-time homebuyers. Thay represented 30% of home sales last month, a figure unchanged from May and considerably lower than the past average of 40%. Conversely, buyers with the financial capacity to purchase at current rates or pay in cash are finding more options available, as inventory levels have increased.

At the close of last month, there were 1.53 million unsold homes on the market, a slight decrease of 0.6% from May but a notable increase of nearly 16% compared to June of the previous year. Despite this year-over-year growth, the total number of homes for sale remains below the pre-pandemic norm of approximately 2 million. The current inventory translates to a 4.7-month supply at the prevailing sales pace, a marginal increase from 4.6 months in May and up from 4 months in June last year. A balanced market, typically considered to have a 5- to 6-month supply, has not yet been reached.

Homes are also spending more time on the market before selling, with properties averaging 27 days before finding a buyer last month, up from 22 days in June of the prior year. This extended market time is contributing to a trend where a higher percentage of listings are experiencing price reductions. In June, 20.7% of homes for sale had their prices reduced, marking the highest share for that month since at least 2016, according to Realtor.com. Tho, an increasing number of sellers are choosing to remove their properties from the market altogether rather than accept lower prices, with the number of unsold homes taken off the market jumping 47% in May compared to the previous year.

Lawrence Yun

Home Sales Decline: Los Angeles Market Faces Record Prices

US home sales fade in June as prices soar to record levels