National home sales dropped to their lowest level since mid-2020 in July, down 19% year over year.
It’s the biggest annual decline in more than a year, according to a Redfin report, which called it a “reflection of the continued cooling effects of 5.4%-plus mortgage rates and nationwide economic uncertainty.”
In July, home sales declined for the sixth month in a row, falling 4.1% from June as homebuyers backed off due to being priced out of the market or amid worries of future home-value declines.
While sales declined, prices did increase by 7.7%, their slowest pace since June 2020, which the report says reflects the drop in homebuyer demand as houses are staying on the market longer.
Sellers took it slowly as well last month. New listings were down 13.5% from last year, the biggest decline in over a year. July also had the highest share of sellers dropping their asking prices since 2012, with 21% cutting their asking price.
Redfin agent Pam Lewis said buyers who are still in the game are finally getting a break from bidding wars, allowing them to be picky.
“Three months ago, buyers were saying, ‘Get me a building with four walls, and I’ll make it work.’ Now they have some choices,” Lewis said. “They don’t want a home if it doesn’t have the fenced-in yard or guest room on their wish list, and they want a $20,000 price reduction if a home has been on the market for more than a week. I’m telling buyers they’re not likely to see their property values decrease over time, but they may not appreciate as fast as homeowners have become accustomed to in the past few years.”