One positive consequence of home sales being so low is that it does not take long to count them. We already have the Maricopa County affidavit numbers for July and they look like this:

• There were 7,175 closed home sales during July. This compares very unfavorably with July 2021 when we had 10,720. The year-over-year decline in sales is 33%.
• The median sales price was $475,000, down from $486,824 in June but up from $409,468 in July 2021. The year-over-year increase in median sales price is 16%, down from 22% last month and 25% in May.
• There were 1,256 closed new home sales during July. This is down from 1,316 in July 2021. New home sales are down less than 5% year-over-year
• The median sales price for new homes was $516,842, up from $500,454 in June and up 23% from $419,618 in July 2021.
• There were 5,919 re-sales during July. This is down 37% from 9,404 in July 2021
• The median sales price for re-sales was $464,000 in July, down from $484,000 in June and the lowest median sales price since February 2022. It is up 15% year-over-year however.

Re-sales react far more quickly to changing market conditions because the time between contract signature and closing is much shorter than for new homes. This is especially true in 2022 because of extended lead times on new homes due to shortage of skilled labor and supply-chain problems with many building products.

The re-sale numbers are worse than anticipated with a huge drop in closed volumes and a large fall in median price of $20,000, over 4% in just one month. The new home numbers are better than expected with a new high being reached in the median sale price and only a small drop in units closed.

An optimist might hope for a bounce back in August, but with listings under contract down 6.5% compared with the beginning of July, this is looking unlikely.

Re-sale home prices are clearly falling which would normally increase demand, but if buyers think they will fall further, their motivation is likely to be low. However falling home prices will ultimately help with getting inflation under control. That is a prerequisite to the Federal Reserve halting their program of regular increases in federal funds interest rates.

Market insights provided by the Cromford report.