U.S. Sales of Previously Owned Homes Decline for Third Month

Sales of previously owned U.S. homes unexpectedly fell in June, indicating a shortage of affordable listings and rising prices continue to limit demand, a National Association of Realtors report showed Monday.

Highlights of Existing-Home Sales (June)

  • Contract closings fell 0.6% m/m to a 5.38m annual rate (est. 5.44m), a third straight decline, after a revised 5.41m (prev. 5.43m)
  • Median sales price increased 5.2% y/y to a record $276,900
  • Inventory of available properties rose 0.5% y/y to 1.95m for first increase since mid-2015  

Key Takeaways

While inventories rose, affordability remains a constraint for prospective buyers, especially younger Americans or those entering the market for the first time. There is a persistent shortage of available listings to choose from, while property prices are outpacing wages. In addition, borrowing costs have also increased this year.

Official’s View

"This is an indication that possibly the lows in inventory may be coming to an end," Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. "We have to wait and see whether this is just a one-month thing."

Other Details

  • Purchases rose 5.9 percent in the Northeast and edged up 0.8 percent in the Midwest, while those in the South dropped 2.2 percent and slipped 2.6 percent West
  • At the current pace, it would take 4.3 months to sell the homes on the market, compared with 4.1 months in May
  • Single-family home sales declined 0.6 percent to annual rate of 4.76 million
  • Purchases of condominium and co-op units unchanged at 620,000 pace
  • First-time buyers made up 31 percent of all sales, unchanged from May and down from 32 percent a year earlier
  • Homes were typically on the market for 26 days, down from 28 days a year earlier
  • 58 percent of homes sold in June were on market for less than a month, NAR said
  • Existing home sales account for about 90 percent of the market and are calculated when a contract closes. New home sales, considered a timelier indicator though their share is only about 10 percent, are tabulated when contracts get signed.

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