Although existing home sales are less economically important than new home sales, what has been happening with their prices, given the experience of the housing bubble and bust 15 years ago, is of added importance.
The simple summary is that sales have declined substantially, while price appreciation keeps rolling on.
Sales of existing homes were down 3.4% for the month, seasonally adjusted; down 8.6% YoY; down almost 20% from their January 2021 peak; and, at 5.41 million annualized, the lowest level since June 2020:
This isn’t a crash – at least, not yet. But it is certainly at a level consistent with an oncoming recession.
The story is completely different as to prices. At $407,600, the median price of an existing home increased 4.8% for the month and 14.8% YoY (Note: prices aren’t seasonally adjusted, so the YoY view is the best measure; graph does not show this morning’s data):
Prices were up over 25% YoY last June, so while this is a 40% deceleration, it is consistent with continued price appreciation if we were able to seasonally adjust.
Additionally, in May inventory was still down -4.1% YoY. Importantly, the NAR’s weekly update showed inventory increasing YoY in the last week of May and the first several weeks of June, so this may be the last hurrah for that metric.
Bottom line: Prices follow sales, and will in this case as well, but they haven’t – yet.