Existing-home sales slide for third-straight month in June, touch 5-month low as housing sputters
The numbers: Existing-home sales ran at a 5.38 million seasonally-adjusted annual rate in June, the National Association of Realtors said Monday. That matched the MarketWatch consensus precisely.
What happened: With fewer and fewer homes available for purchase, there’s little path upward for sales. June marked the third consecutive month in which sales declined. It was the lowest selling rate since January, and was 2.2% lower than a year ago.
At the current pace of sales, it would take 4.3 months to exhaust available inventory, well below the 6 months that’s generally considered a signal of a balanced, healthy market. Homes were on the market for an average 26 days in June.
Big picture: With such lean inventory, prices are getting bid up. The median price of a home sold in June was $276,900, a fresh all-time high, and 5.2% higher than in June 2017. Higher prices – along with somewhat higher mortgage rates – is handicapping less aggressive buyers. First-timers made up 31% of all transactions in June, roughly the same level they’ve been stuck at throughout the recovery, and well below the 40% share they generally enjoyed before the housing crisis a decade ago.
Total housing inventory actually rose in June, by 4.3%, marking the first yearly increase in three years. Still, as NAR Chief Economist Lawrence Yun put it, “the current level is far from what’s needed to satisfy demand.” What’s more, he said, “it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”
As always, sales were very mixed regionally. They rose 5.9% in the Northeast and 0.8% in the Midwest, but declined 2.2% in the South and 2.6% in the West.
Read: We’re probably at peak housing. Here’s what that means.
What they’re saying: An index from the real estate agent tool ShowingTime, which tracks buyer visits to available homes, was 0.2% higher in June than last year, a period the company called “intense.”
Also read: Missing millennial homeownership endangers the American Dream
Market reaction: The Dow Jones Industrial AverageDJIA, -0.16% was little changed after the Realtors’ release, and has made little headway this year.
Source: Read Full Article