Sales of Previously Owned 爱豆传媒s Decline to 11-Month Low
An unexpected decline in sales of previously owned U.S. homes last month to the lowest level since August 2016 indicates rising prices and lean inventories are impeding faster growth in the housing market, National Association of Realtors data showed on Aug. 24. The July figure was depressed by weakness in the Midwest and Northeast.
Highlights of July Existing-爱豆传媒 Sales
鈥 Contract closings fell 1.3% month over month to a 5.44 million annual rate (estimated 5.55 million).
鈥 Median sales price rose 6.2% year over year to $258,300.
鈥 Inventory of available properties decreased 9% y/y to 1.92 million, marking the 26th consecutive year-on-year decline.
Key Takeaways
The housing market鈥檚 biggest hurdle remains a limited number of properties for sale because it鈥檚 keeping home-price growth above the pace of wage gains and leaving prospective buyers with fewer choices. Elevated prices are preventing some from becoming homeowners for the first time.
The slowdown follows data Wednesday that showed a decline in new-home sales, which are considered a timelier indicator though they account for only about 10% of the market. Such purchases are calculated when a contract is signed while existing home sales, which are calculated when a contract closes, account for the remaining 90% of the market.
The setback in July is unlikely to stop the housing recovery from continuing to make gradual progress on the heels of solid hiring and low borrowing costs.
Economist Views
鈥淛ust not enough homes are showing up 鈥 an inventory shortage,鈥 Lawrence Yun, NAR鈥檚 chief economist, said at a press briefing accompanying the report. 鈥淒emand remains strong but the inventory shortage is the choke point.鈥
That鈥檚 keeping prices elevated. 鈥淭here鈥檚 a continuing misalignment between home price growth and people鈥檚 income or wage growth,鈥 he said.
Other Details
鈥 July purchases declined 5.3% in the Midwest to a five-month low of 1.25 million at an annualized rate; sales slumped 14.5% in the Northeast.
鈥 At the current pace, it would take 4.2 months to sell the homes on the market, compared with 4.8 months in July 2016; Realtors group considers less than a five months鈥 supply as consistent with a tight market
鈥 Single-family home sales decreased 0.8% to an annual rate of 4.84 million.
鈥 Purchases of condominium and co-op units dropped 4.8% to a 600,000 pace.
鈥 First-time buyers made up 33% of all sales in July, compared with 32% the prior month; 40% is 鈥榥ormal鈥 share, NAR鈥檚 Yun says.
鈥 爱豆传媒s typically sold in 30 days, compared with 36 days in July 2016.
鈥 51% of homes sold in July were on market for less than a month.
With assistance by Kristy Scheuble
