The real estate market is churning again, and based on the latest home sales numbers from several sources, the end of private home bidding wars may be nearing its end.
According to the National Association of Realtors (NAR), existing home sales declined for the sixth consecutive month, dropping 5.9% from June to a seasonally adjusted annual rate of 4.81 million. The numbers represent a more than 20% drop from a year ago. The association is quick to blame rising mortgage rates as the main culprit.
“The ongoing sales decline reflects the impact of the mortgage rate peak of 6% in early June,” NAR Chief Economist Lawrence Yun said. “Home sales may soon stabilize since mortgage rates have fallen to near 5%, thereby giving an additional boost of purchasing power to homebuyers.”
At the same time, online real estate brokerage Redfin Corp. (NASDAQ:RDFN) reported a 19.3% year-over-year sales drop in July to their lowest level since the beginning of the pandemic when the housing market stalled to a near standstill. Redfin also blamed rising mortgage rates as the reason.
“The buyers who are still in the game are finally getting a break from bidding wars, which means they can be picky,” North Carolina Redfin agent Pam Lewis said. “Three months ago, buyers were saying, ‘Get me a building with four walls, and I’ll make it work.’ Now they have some choices.”
NAR also reported that home prices are still going up, at a rate of nearly 11% compared to last year, and prices were up in all four national regions, marking the 125th consecutive month of year-over-year increases. That mark breaks an industry record streak of rising prices.
Median home prices were at $444,000 in the Northeast, an 8.1% increase; $293,300 in the Midwest, a 7% increase; $365,200 in the South, up 14.7%; and $614,900 in the West, up 8.1%. Total housing inventory increased 4.8% from July to 1.3 million units — a 3.3-month supply equal to last year.
But that good news was countered with the declining sales numbers, though July statistics still show homes selling quickly, with 82% gone in less than a month.
For the time being, sellers are waiting to put their homes on the market, affecting inventory. Many, according to Redfin, are hesitant to sell because their home mortgage rates are low compared to current rates, which have been hovering around 6%.
Related News Highlights in Real Estate Investing
- The Bezos-backed real estate investment platform Arrived Homes launched a new batch of offerings to allow retail investors to purchase shares of single-family rental homes with a minimum investment of $100. The platform has already funded over 150 properties with a total value of over $50 million.
- Vacation rental investment platform Here is set to launch its new offering for a San Diego property with a $100 minimum investment. The company says vacation rentals generate up to 160% more revenue on average than traditional long-term rentals, according to data from Zillow and AirDNA.
Find more current offerings and news on Benzinga Alternative Investments
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