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Existing Home Sales: Touch Weaker, But Trend Still Improving

July 23, 2019

Bottom Line: Existing home sales rose a touch less than expected in June. But there were modest upward revisions to prior data, and the trend is stabilizing. Slowing since late '17 until plunging to near cycle lows in January, sales have shown signs of improvement over the last several months. Sales over the last three months averaged 5.28 million units annualized, above the six-month average, 5.24 million, and the 12-month average, 5.23 million. While housing bears careful watching as we get more data on the summer selling season, so far the market looks to have stabilized and might even be showing early hints of improvement after 2018's sharp retrenchment.

Existing Home Sales FELL by 1.7% in June to 5.27 million, compared with market expectations for a decline to 5.32 million. The prior month was revised up from 5.34 to 5.36 million.

Home re-sales are now 2.2% BELOW their year ago level and are 27.3% BELOW their September 2005 record high.

The Inventory of Homes Available for Sale ROSE by 1.0% to 1,930k and were UNCHANGED their year ago level. Because inventories increased while sales declined, the Months Supply ROSE to 4.4 months from 4.3 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 3.1% ABOVE their year ago levels while median home prices are 4.3% ABOVE their year ago levels.

Article by Contingent Macro Advisors