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Existing Home Sales: Sales Rise, Inventories Fell, Prices Climb

July 21, 2016
Bottom Line: Existing home sales rose modestly in June, more than expectations, to their highest level since February 2007. Home re-sales have averaged 5.50 million over the past 3 months and 5.40 million over the past 6 months, suggesting that the housing market is continuing to improve. Inventories of homes available for sale dropped modestly and the months’ supply declined slightly. On a year-over-year basis, prices are modestly higher.

Existing Home Sales ROSE by 1.1% in June to 5.57 million, the highest level since February 2007, compared with market expectations for a decrease to 5.48 million. The prior month was revised down from 5.53 to 5.51 million. Home re-sales are now 3.0% ABOVE their year ago level but they are still 23.2% BELOW their September 2005 record high. The year-over-year rate increased for the 7th consecutive month.

The Inventory of Homes Available for Sale FELL by 0.9% to 2,120k and are now 5.8% BELOW their year ago level. Foreclosures and short sales accounted for 6% of June sales, unchanged from May and down from 8% a year ago. All-cash sales were 22% of transactions in June, unchanged from May and a year ago.

Because inventories declined while sales increased, the Months Supply FELL to 4.6 months from 4.7 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 4.2% ABOVE their year ago levels while median home prices are 4.8% ABOVE their year ago levels. There is a broad general improvement in home prices.
Article by contingentmacro