Existing Home Sales: Sharp Rebound, Mostly As Expected
July 22, 2020
Bottom Line: Existing home sales rebounded sharply in June, mostly as expected. Seasonally adjusted sales are still nearly 1 million annualized units below the cycle high of 5.77 million hit in February. These data are based on contract closes rather than on contract signings (like new home sales), and thus can lag a touch more. Housing has been an important part of the rebound from the shutdowns for the novel coronavirus, especially in less dense suburban areas. Single-family home sales were less than 10% below year-ago levels, while sales of condos and co-ops were still nearly 23% below year-ago levels. Overall this report confirmed that housing will be an important driver of growth, but it also confirmed that levels are still well below the pre-Covid trend. Existing Home Sales ROSE by 20.7% in June to 4.72 million, compared with market expectations for an increase to 4.75 million. There were no revisions to prior data. Home re-sales are now 11.3% BELOW their year-ago level and are 34.9% BELOW their September 2005 record high. The Inventory of Homes Available for Sale ROSE by 1.3% to 1,570k but are still 18.2% BELOW their year-ago level. Because inventories increased while sales increased, the Months Supply FELL to 4.0 months from 4.8 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6-month level that is considered 'normal'. Home Prices ROSE compared to their year-ago levels. Average home prices are 2.6% ABOVE their year-ago levels while median home prices are 3.5% ABOVE their year-ago levels.
Article by Contingent Macro Advisors