July sales of existing homes fell from June sales, according to the National Association of Realtors.
The projected number of sales of existing homes is expected to reach only 4.81 million units, which is the slowest sales rate since November 2015.
In general, as the sales rate continues to flatten or even drop due to the higher interest rates, the shortage of available existing homes and the impact of inflation on the home buyers’ budget, the number of closed sales are not as robust as the prior year.
Clearly, there is a shift from home buying to home rentals, as is being reflected in the increase in the cost to rent a single-family home nationwide.
According to the Mortgage News Daily, the average mortgage rate in June for a 30-year-fixed loan was approximately 6%, which is the highest rate in almost a decade, and double that rate in just 18 months. Even though demand appears to be falling according to the recent report, the median price for a home sold in July was approximately $404,000, representing a 10.8% year-over-year increase. This double-digit appreciation factor is not simply the result of a stronger demand but rather a clear result of the shortage of inventory, compounded with the impact of inflation on the buyer’s wallet. Even though the median sales price for a home has been rising at a slower rate, demand for homes is still unabated. Some sellers are seeing that the weaker home buyer demand is forcing them to reduce the list sales price of their property. But part of this reduction is the result of an unwarranted expectation that the frenzied buyer demand is going to continue into the fall selling season. The report reflects that the homes priced between $100,000 and $250,000 have fallen, but this is clearly a byproduct of the strong home flipper market and the absence of homes in that price and category. Right now, first-time home buyers represent less than 30% of all buyers in the market, due to the unaffordability of homes. According to the report, the average home went under contract in just 14 days, which equals that of June.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.