Home prices have suffered their biggest year-on-year decline since 2011 as investors pulled back amid disappointing sales and rising supply.

June (the next month’s data) will be the final leg of the spring sales season. Then things went downhill till early 2024.

By wolf richter For wolf street,

The housing data we’re seeing today — sales that closed in May — is still coming from the spring sales season when prices and sales always go up. This seasonal surge also occurred during the housing bust 1.

The median price of all types of pre-owned homes – houses, condos and cooperatives – for sale fell 3.1% year-over-year to $396,100 in May, marking the fourth consecutive month of year-over-year declines. , and the largest since December 2011 during the housing bust 1, according to the National Association of Realtors.

For single-family homes, the median price fell 3.4% year-over-year, the fourth consecutive decline, to $401,100. For condos, the median price decreased year-over-year for the first time since the lockdown in May 2020 to $353,000 (historical data) YCharts,

From the seasonal peak last June, the median price for all previously owned homes declined 4.3%. The average price of the NAR almost always shows a seasonal peak in June, followed by a seasonal decline for the rest of the year and in January/February of the following year. You can see this pattern in the chart below. This pattern also occurred during the housing bust 1.

As 2023 is seasonal, the median price data for June will have a final month-on-month increase, followed by a month-on-month decline for the remainder of the year and into early 2024, before the start of the next spring sales season The green line connects May 2023 and May 2022 (historical data via YCharts):

Sale of all previously owned houses, Seasonally adjusted, April to May grew a hair (+0.2%) to reach a seasonally adjusted annual rate of 4.30 million home sales.

Seasonally adjusted annual rate of sales in May compared to May of previous years:

  • May 2022: -20.4%.
  • May 2021: -27.4%.
  • May 2019: -19.3%.
  • May 2018: -20.4%.

On the other hand, the home builder – Professionals who have to build and sell homes, regardless of the price environment – have discovered that at the right price, almost any home will sell. so they have cut the prices, and they’re driving down mortgage rates, and they’re building at lower price pointsAnd their orders have soared from last year’s lows and cancellations, as buyers have shifted to buying new homes rather than overpriced existing homes, whose sellers and potential sellers are still in confusion, are also expected to — 6.5% to 7% mortgage rates – will pass.

Actual sales in May – not seasonally adjusted annual rate – Fell 18.2% year-over-year to 408,000 homes. You see seasonal patterns in non-seasonally adjusted real sales (data via NAR), including the spring sales season:

Investors step back: All-cash sales – often to investors and second home buyers – to fall 18.2% year-over-year from 102,000 homes in May 2023 (25% of 408,000 sales) to 125,000 homes in May 2022 (25% of 499,000 sales) .

By region, year-on-year sales declined in all regions (Map via NAR):

Average days to market increased year-on-year, Homes that actually sold spent 18 days on the market in May before selling, up from 16 days in May last year, according to NAR.

Another measure of average days on market, which tracks how many days homes were on the market before either sold or were done The market has increased from 30 days in May 2022 to 43 days in May 2023. realtor.com,

increased inventory for sale Reduced from 1.04 million homes in April to 1.08 million homes, but has come down to 1.15 million homes in May 2022.

months supply increased to 3.0 months, up from 2.9 months in April, and up from 2.6 months in May 2022. Supply normalized between 3.0 and 4.5 months from 2017 to 2019 (historical data via YCharts).

Enjoy reading Wolf Street and want to support it? You can donate. I appreciate it very much. Click on the Beer & Ice-Tea Mug to find out how:

Would you like to be notified by email when WOLF STREET publishes a new article? Sign up here,

Source link

Leave a Comment