Existing Home Sales and Inventory Climbs
Unsold existing homes inventory climbed finally by 3.8%,reaching 1.08 million at the end of May, up from April.
The total existing-home sales also rose 0.2% from April. As expected, year-over-year, sales dropped 20.4%.
The impact of high mortgage rates, inflation and the inventory shortages of existing homes continues to limit the number of transactions. Still, these numbers have finally gone from red to black!
According to NAR Chief Economist Lawrence Yun, “Total housing inventory registered at the end of May was down from 1.15 million in 2022, to just 1.08 million units. The good news was that May’s inventory was up 3.8% from April, 2023.”
Existing-home sales activity is down significantly due to the current supply shortage, which is one-third of the levels in 2018 in New Jersey.
Nationally, median existing-home prices for all housing types in May was $396,100, a decline of 3.1% from May 2022 ($408,600), but in the Northeast, the median price increased to $439,000, up 2.5% from 2022.
In the Northeast, existing-home sales declined 2.0% from April to an annual rate of 500,000 in May, down 25.4% from May 2022.
The National Association of Realtors explains the “slow spring sales pace is a combination of still-high prices, higher mortgage rates, and a critical shortage of homes for sale.”
There were 1.08 million homes on the market at the end of May, 6.1% lower than the supply in 2022.
At the current sales pace, that represents a three-month supply. Six months is considered a balanced market. Before the COVID pandemic hit, there were nearly twice as many homes on the market.
New construction homes are selling at a pre-pandemic rate.
The average contract interest rate on the popular 30-year fixed mortgage started March over 7%, then fell briefly to 6%, going higher again, to around 6.5%.