On the heels of an unexpected decline in new home sales yesterday, comes news of an unexpected decline in existing home sales today.
The Econoday consensus estimate for existing home sales was 5.565 million at a seasonally adjusted annualized rate up from a reported 5.520 million in June.
Instead, existing home sales fell 1.3% from a downward revision to 5.510 million in June, a 2017 Sales Low according to Mortgage News Daily.
Sales of existing homes, like those for newly constructed ones, performed poorly in July. The National Association of Realtors® (NAR) said today that those sales of existing single-family houses, townhouses, condos, and cooperative apartments slipped 1.3 percent from their June level to a seasonally adjusted annual rate of 5.44 million units, the lowest sales rate thus far in 2017. In addition, June sales, originally reported at 5.520 million, a decline of 1.8 percent from May, were revised down to 5.510 million. Despite the declines, sales in July were still running 2.1 percent ahead of last year.
Analysts had expected sales to increase, largely because of an uptick in the June pending sales report. Results, however, were at the low end of their projections, which ranged from 5.410 to 5.650 million. The consensus among those polled by Econoday was 5.565 million.
Lawrence Yun, NAR chief economist, says the second half of the year got off on a somewhat sour note as existing sales in July inched backward. “Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” he said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”
The median existing-home price for all housing types was $258,300, up 6.2 percent from $243,200 in July 2016. July’s price increase marks the 65th straight month of year-over-year gains. The median existing single-family home price rose 6.3 percent to $260,600 and the median existing condo price was $239,800, a 5.3 percent annual increase.
“Home prices are still rising above incomes and way too fast in many markets,” said Yun. “Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
Total housing inventory at the end of July another declined 1.0 percent to 1.92 million existing homes available for sale, and is now 9.0 percent lower than a year ago when the inventory stood at 2.11 million. The number of available homes for sale has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, down from 4.8 months a year ago.
Existing Home Sales
Volatility adds a lot of news to year-over-year reports. Sales are up 2.1% from a year ago because July 2016 was even weaker. August provides and easy to beat target as well.
September will provide a hard to beat number and year-over-year sales are likely to be negative.
Existing Jome Sales Supply
Supply numbers are not seasonally adjusted. That explains the pattern shown above.
Existing home sales numbers are still trending higher, but the market is very weak. Fred data does not go back far enough to show.
Data is available for new homes.
New Home Sales 1963 to Present
People cannot afford the prices asked. For further discussion, please see New Home Sales Plunge to Lowest Annualized Pace in Three Years.
Mike “Mish” Shedlock