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Existing Home Sales: Decline following strong new home sales

August 25, 2016

Bottom Line: Existing home sales fell modestly in July to their lowest level since the 1st Quarter. Home re-sales have averaged 5.49 million over the past 3 months and 5.39 million over the past 6 months, suggesting that the housing market is still improving. Inventories of homes available for sale climbed modestly; and the trend in months’ supply rose slightly. On a year-over-year basis, prices are still modestly higher. These data are based on closings while yesterday's stronger new home sales data are based on signed contracts, which are typically more forward-looking.

Existing Home Sales FELL by 3.2% in July to 5.39 million, compared with market expectations for a decrease to 5.51 million. There were no revisions to prior data.
Home re-sales are now 1.6% BELOW their year ago level and are 25.7% BELOW their September 2005 record high. Fewer lower cost existing homes are selling - Single family sales are down 8.2% year-over-year for home prices 100k to 250k, up 2.5% for 250k to 500k and up 1.6% for 500k to 750k.

The Inventory of Homes Available for Sale ROSE by 0.9% to 2,130k but are still 5.8% BELOW their year ago level. Because inventories increased while sales declined, the Months Supply ROSE to 4.7 months from 4.5 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 3.6% ABOVE their year ago levels while median home prices are 5.3% ABOVE their year ago levels.

Article by contingentmacro