Bond Market Update

Data Recon

• Existing home sales decreased 5.4% month-over-month in June to a seasonally adjusted annual rate of 5.12 million (Briefing.com consensus 5.40 million) versus 5.41 million in May. Total sales in June were down 14.2% from a year ago.
• The key takeaway from the report is that the supply of available homes for sale remains extremely tight, yet higher mortgage rates and home price inflation are contributing to a slowdown in buyer demand rooted in affordability pressures that are expected to persist.
  • The median existing home price for all housing types increased 13.4% year-over-year to a record high $416,000, representing the 124th consecutive month of year-over-year gains, which is also longest-running streak on record. The median price for single-family homes increased 13.3% yr/yr to $423,300.
  • Existing home sales across regions: Northeast (unchanged); Midwest (-1.6%); South (-6.2%); and West (-11.1%).
  • Median home prices by region year-over-year: Northeast (+10.1% to $453,300); Midwest (+10.2% to $306,900); South (+16.8% to $374,900); and West (+9.6% to $624,000).
  • The inventory of homes for sale at the end of June was up 9.6% month-over-month at 1,260,000 units, and up 2.4% from a year ago.
  • Unsold inventory increased to a 3.0-month supply at the current sales pace, versus 2.6 months in May, but it is still well below the 6.0-months' supply typically associated with a more balanced market.
  • First-time buyers accounted for 30% of sales in June, up from 27% in May and down from 31% in June 2021.
  • All-cash sales comprised 25% of transactions in June, unchanged from May and up from 23% in June 2021.
  • 88% of homes sold in June were on the market for less than a month, with properties typically remaining on the market for a record low 14 days, down from 16 days in May and 17 days in June 2021.
• Yield Check:
  • 2-yr: -1 bp to 3.21%
  • 3-yr: -3 bps to 3.19%
  • 5-yr: -4 bps to 3.11%
  • 10-yr: -3 bps to 2.99%
  • 30-yr: -3 bps to 3.15%