For the sixth straight month, existing home sales in the U.S. continue to slide. Sales in July fell by nearly 6% compared to the previous month, according to findings by the National Association of Realtors (NAR) on Thursday.
The dip equates to about 4.81 million units, the NAR said, marking its slowest sales pace since November 2015 – with the exception of the drop seen at the beginning of the COVID-19 pandemic two years ago. The NAR said sales fell about 20% compared to July 2021, when the housing market remained hot.
Chief Economist Lawrence Yun of NAR said in a statement that the ongoing sales decline reflects the impact of the 30-year fixed-rate mortgage peaking as high as 6% in early June before settling currently into a still-high 5% range compared to record low rates the past few years.
The latest figures further fuel a simmering debate about whether the once scorching housing market after two years is in the midst of a recession or a correction. "In terms of economic impact, we are surely in a housing recession because builders are not building," the NAR's Yun said.
The median existing-home price for all housing types in July was $403,800, up about 10.8% from July 2021 ($364,600), as home prices increased in all four regions, the NAR reported. That makes more than 10 years of year-over-year increases, the longest-running streak on record, the NAR said.
And, while America is fighting off an economic recession, generally defined as when the Gross Domestic Product (GDP) declines for two straight quarters – roughly a six-month period – the NAR informally, but similarly defines a housing recession as when home sales decline for six straight months. NAR top researcher Yun said that while the U.S. is "witnessing a housing recession in terms of declining home sales and home building," it’s not seeing a recession in terms of home prices.