Sales of previously owned homes fell nearly 6% in July compared with June, according to a monthly report from the National Association of Realtors.
The sales count declined to a seasonally adjusted annualized rate of 4.81 million units, the group added. It is the slowest sales pace since November 2015, with the exception of a brief plunge at the beginning of the Covid pandemic.
Sales dropped about 20% from the same month a year ago.
“In terms of economic impact we are surely in a housing recession because builders are not building,” said Lawrence Yun, chief economist for the Realtors. “However, are homeowners in a recession? Absolutely not. Homeowners are still very comfortable financially.”
The July sales figures are based on closings, so the contracts were likely signed in May and June. Mortgage rates spiked higher in June, with the average rate on the 30-year fixed loan crossing 6%, according to Mortgage News Daily. It then settled back into the high 5% range. That rate started this year around 3%, so the hit to affordability in June was hard, especially coupled with soaring inflation.