US Existing Home Sales Decrease by 1.7% in July Amid Rising Prices for 37 Consecutive Months

[Mexico City = Shim Young-jae, Correspondent] Existing home sales in the United States decreased by 1.7% in July compared to the previous month. Despite the average 30-year fixed mortgage rate rising to 6.54%, sales volume increased by 0.7% compared to the same period last year. The median sale price of existing homes reached $434,100 (approximately 614 million KRW), continuing a 37-month streak of year-on-year increases.

According to the National Association of Realtors (NAR), existing home sales in July were recorded at an annual rate of 4.06 million units as of the 11th (local time). Although this represents a 1.7% decrease from the previous month, it is a 0.7% increase compared to July of last year.

Stable Sales Despite High Interest Rates... Cumulative Increase of 2.4% This Year

The US housing market is maintaining transaction volumes similar to last year despite high mortgage rates.

According to NAR, existing home sales in the Northeast increased compared to the previous month, while sales in the West remained unchanged. Sales in the Midwest and South decreased. Compared to the same period last year, sales increased in the Midwest and West, while there were no changes in the Northeast and South.

Lawrence Yun, NAR's chief economist, stated, "Despite the rising mortgage rates in recent months, home sales have been remarkably stable," adding, "Sales volume has increased by 2.4% so far this year."

He further explained, "There is no doubt that if the average mortgage rate returns to around 6%, the housing market will gain momentum."

In fact, mortgage rates have risen again. According to Freddie Mac data cited by NAR, the average rate for a 30-year fixed mortgage in July was 6.54%, up from 6.49% in June, but lower than the 6.72% recorded in July of last year.

The inventory of existing homes stood at 1.54 million units, a 1.9% decrease from June. Compared to the same period last year, it has decreased by 0.6%. The unsold housing inventory is currently equivalent to 4.6 months of sales at the current pace, unchanged from the previous month and the same period last year.

Home Prices Rise for 37 Consecutive Months... Improvement in Affordability

Although transaction volumes decreased compared to the previous month, home prices continued to rise.

According to NAR, the median sale price of existing homes in July, including all types, was $434,100, up 2.0% from $425,700 in the same period last year. This marks the 37th consecutive month of year-on-year price increases for existing homes.

By type of home, single-family home sales decreased by 1.9% to an annual rate of 3.69 million units. Compared to the same period last year, this represents a 0.8% increase. The median price for single-family homes rose by 1.9% to $440,300 compared to last year.

Condo and co-op sales remained at 370,000 units, unchanged from the previous month and the same period last year. The median price increased by 2.2% to $371,800 compared to last year.

Despite rising home prices, the affordability index improved. NAR's July housing affordability index was 103.3, up from 98.3 in the same period last year.

Affordability improved across all regions. Compared to last year, the Northeast increased by 1.5%, the Midwest by 4.0%, the South by 6.1%, and the West by 7.3%.

Chief economist Yun noted, "While national indicators show stabilization, there are noticeable differences regionally," adding, "In small towns, especially in the Midwest, an annual household income of $60,000 is sufficient to purchase a home at the median price."

South Sees 3.1% Decrease in Sales... Regional Disparities

In the regional housing market, the South experienced the largest decrease in sales.

According to NAR, existing home sales in the South in July decreased by 3.1% to an annual rate of 1.86 million units, unchanged from the same period last year. The median price rose by 0.9% to $371,700 compared to last year.

Sales in the Midwest decreased by 2.0% to an annual rate of 970,000 units. Compared to last year, this represents a 2.1% increase. The median price rose by 2.8% to $342,900.

The Northeast recorded an increase of 2.0% compared to the previous month, with an annual rate of 500,000 units. There was no change compared to last year. The median price jumped by 5.2% to $563,800, the highest increase among the four regions.

Sales in the West remained at 730,000 units, unchanged from the previous month, and increased by 1.4% compared to last year. The median price rose by 0.2% to $622,200 compared to last year.

In actual transactions, the time homes spend on the market has slightly increased. According to NAR's July Realtor Confidence Index, the median time from listing to sale was 29 days, one day longer than the 28 days in June and the same period last year.

First-time homebuyers accounted for 29% of all transactions. This is a decrease from 33% in June but higher than 28% in the same period last year.

The share of cash transactions was 26%, up from 25% in June but lower than 31% in the same period last year. The proportion of individual investors and second-home buyers was 14%, up from 13% last month but down from 20% in the same month last year.

Transactions involving distressed properties, including foreclosures and short sales, accounted for 2% of the total. This figure remained unchanged from the previous month and the same period last year.

The July indicators show that the US housing market is experiencing limited adjustments rather than a sharp contraction in transactions due to high borrowing costs. While sales volume decreased compared to the previous month, it increased year-on-year, and housing affordability improved. Meanwhile, home prices have continued to rise for 37 consecutive months, with the direction of mortgage rates remaining a key variable for future transaction recovery.

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