With the June 2022 real estate market, housing affordability continued its affordability crisis for potential home buyers. However, New Home Sales offer a beacon of hope with a notable gain.
Existing Home Sales Fall While New Home Sales Offer Upside to June 2022 Real Estate
In terms of Existing Home Sales, June 2022 real estate saw its fourth straight month of declines. Although Existing Home Sales accumulate 90% of real estate market activity, they fell to their lowest level since June 2020. Furthermore, the Median Existing-Home price increased 15% higher than a year ago at a record $407,600.
Worth noting, home priced between 100,000 and $250,000 sold 27% less compared to the prior year. Conversely, sales of homes priced between $750,000 and $1,000,000 soared 26% during that exact same timeframe.
In spite of the decline in Existing Home Sales, New Home Sales offer an upside to the June 2022 real estate data. Making up the remaining 10% of home sales, New Home Sales pleasantly surprised investors and analysts with an 11% gain from April of this year. Similarly helping the affordability crisis, the Median New-Home Price saw a modest drop from May’s record-high.
Housing Starts Suffer Amidst Supply & Labor Shortages
Contributing to the inventory challenge, Existing Home Inventory declined 4% from a year ago. At this point, Existing Home Inventory sits well below equilibrium, amassing just a 2.6-month supply throughout the country.
Examining June 2022 real estate trends, May Housing Starts fell 14% from April. Thus, May Housing Starts dropped far below the consensus forecast, notching their lowest level since April 2020. Now, prospective home buyers desperately require greater housing inventory throughout the United States.
While building permits witnessed a 7% decline from April, the major problem harkens back to the supply chain and labor shortages. Ultimately, home builders point to higher prices and shortages for land, materials, and skilled labor as their primary barriers to a faster construction pace.
June 2022 Real Estate: Old Challenges, New Opportunities
As mortgage and refinancing activity drop alongside rising rates, Existing Home Sales felt the impact. On that same note, the United States faces a seemingly perennial housing inventory challenge as figures hover well below a balanced amount.
Optimistically, the growth in New Home Sales presents new opportunities compared to the rest of the June 2022 real estate data. As the supply chain and labor obstacles resolve over time, Housing Starts should see enhanced activity.
For questions on the real estate market, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.
Information accredited to MBSQuoteline.
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