Home Sales in June Fall for 6th Straight Month; Inventory Improves

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales — FELL 0.6 percent, 30,000, in June a seasonally adjusted annual sales rate of 5.38 million;
  • The May sales rate was REVISED DOWN 20,000 to 5.41 million;
  • Median price of an existing single-family home ROSE 4.5 percent, $11,800, to $276,900;
  • Year-year the median price is up 5.2 percent or $13,600;
  • Number of homes available for sale ROSE 80,000 or 43. percent to 1.95 million;
  • The months’ supply of homes for sale in June was UP 0.2 months to 4.3 months.

Trends:

  • Existing home sales (closings) FELL for the third straight month and year-year sales were down 2.4 percent, the fourth month in a row year-year have slipped;
  • Number of homes for sale INCREASED for the sixth straight month, to the highest level since October 2016;
  • The median price of an existing single-family home ROSE for the sixth straight month;
  • The median price of an existing single-family home in the West topped $400,000 for the first time since the NAR began reporting sales and prices in 1999.

Data Source: National Association of Realtors: (NAR) tinyurl.com

 

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Housing doldrums continued in June though, if Freddie Mac’s analysis is correct, there may be light at the end of the tunnel.

At about the same time the National Association of Realtors (NAR) was issuing its report on June existing home sales, Freddie Mac issued its July housing forecast which blamed weak sales on a low inventory of existing homes for sale.

According to the NAR report, the number of existing homes for sale increased in June to a seasonally adjusted annual rate of 1.95 million. It was the sixth straight month the inventory has increased, a jump 33.6 percent over that span. For the first time in more than three years (since June 2015), inventory is up year over year. The months’ supply of new homes (calculated as the inventory divided by the sales pace) reached its highest level, 4.3, since October 2016.

Though not cited by the NAR as an explanation, the tax law changes which capped the deductibility of real estate taxes has had an impact as well. Since the tax law took effect in January, the pace of housing sales has fallen 4.1 percent in the Northeast and Western regions (combined) where real estate taxes are the highest and just 2.8 in the Midwest and South combined.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

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