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Existing Home Sales:  Surprise Decline in August

September 22, 2016
Bottom Line: Existing home sales fell modestly in August to their lowest level since February. With inventory levels 10% below year ago levels, realtors cited higher prices (median reported prices are now up 5.1% year-on-year) as a cause for lower demand. Home re-sales have averaged 5.43 million over the past 3 and 6 months, suggesting that the housing activity is moderating. Regionally the Northeast saw sales rise 6.1% while the South fell 2.7% and the West fell 1.6% in August.

Existing Home Sales FELL by 0.9% in August to 5.33 million, compared with market expectations for an increase to 5.45 million. The prior month was revised down from 5.39 to 5.38 million. Home re-sales are now 0.8% ABOVE their year ago level but are 26.5% BELOW their September 2005 record high.

42.9% of single family homes sold were priced in between 100k to 250k and 32.7% of single family homes sold were priced in between 250k to 500k. Single family home sales are up 7.2% year-over-year for prices in between 100k to 250k and are up 17.6% for prices in between 250k to 500k.

The Inventory of Homes Available for Sale FELL by 3.3% to 2,040k and are now 10.1% BELOW their year ago level. Because inventories declined while sales declined, 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 4.0% ABOVE their year ago levels while median home prices are 5.1% ABOVE their year ago levels.