Published on: August 28, 2023
BY TED C. JONES, PH.D.
Existing home sales continued to erode in July 2023, down 16.6 percent on a seasonally adjusted annualized rate (SAAR) and off 18.1 percent comparing unadjusted sales in July 2023 year-over-year as reported by the National Association of Realtors® (NAR). Year-over-year sales have now declined for a record 23-consecutive months on a SAAR. Sales year-to-date were down 22.3 percent overall with single-family off 21.7 percent and condo-townhouse sales plunging 27.5 percent. The number of months of inventory rose slightly from 2.8 months in June to 2.9 months on a seasonally adjusted basis. Median price was up a slight 1.9 percent year-over-year to $406,700 in July 2023, with single-family up 1.6 percent ($412,300) and condo-coop median price rising 4.5 percent to $357,600.
Box Score -- Existing Home Sales July 2023 National Association of Realtors® (NAR)
Monthly Sales – raw data not seasonally adjusted
Seasonally Adjusted Annualized Sales Numbers (SAAR)
Sales Trailing 12-Months – raw data not seasonally adjusted
Sales Year-to-Date – raw data not seasonally adjusted
Median Price – July 2023 due to historic monthly seasonality of existing home prices, only a year-over-year comparison is made
Single-Family Sales by Price and Median Days on the Market Prior to an Accepted Purchase Contract
Months Inventory – Seasonally Adjusted
Prior to the pandemic, 6 months of inventory for existing homes was considered normal. I do believe, however, with the full integration of online home searches and technologies such as virtual home tours, digital signatures and closing aids such as remote online notarizations, the new normal is one-half the pre-pandemic levels. Thus I would argue that the U.S. overall now is normal in the relative number of listings. The 2.9 months of inventory is not a factor in reduced July 2023 home sales as January 2022 saw 1.8 months inventory with closings at 6.49 million on a SAAR.
The next graph shows the raw, unadjusted number of monthly home sales annually from 2019 through July 2023. The real comparison is not monthly 2023 sales numbers to 2020, 2021 or 2022 as these data are anomalies due to the pandemic. The only time to look at 2020, 2021 and 2022 data in the future will be in the next pandemic (or similar anomaly) to serve as a gauge in forecasting sales and market behaviors at that time. Since the last normal market was 2019, comparison of 2023 data should be made to that year. Sales in 2023 compared to 2019 have dropped every month this year. The erosion in monthly home sales comparing 2019 to 2023 has been -18.9 percent January, -13.5 percent February, -10.3 percent March, -26.1 percent April, -24.7 percent May, -18.0 percent June and -31.1 percent as of July. Existing home sales in 2023 are consistently lagging 2019 – the last normal year prior to the pandemic.
Other Details Included in the NAR July 2023 Release
To read the full press release from NAR click https://www.nar.realtor/newsroom/existing-home-sales-slipped-2-2-in-july
Fannie Mae anticipates 4.21 million existing home sales in 2023 with median price up 3.9 percent while the MBA sees 4.30 million sales with price up a minimal 0.8 percent. The last graph shows Fannie Mae and MBA existing home sales forecasts for the remainder of 2023 and full-year 2024.
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