For the first time since 2015, existing home sales fell in back to back months (-2.0% in June, -1.3% in July), dramatically missing expectations of a 0.5% bounce.
Following the plunge in new home sales, existing home sales tumbled to their lowest SAAR since Aug 2016 as inventories dropped mdoestly (and home prices rose 6.2% YoY)
The median existing-home price for all housing types in July was $258,300, up 6.2% from July 2016 ($243,200). July’s price increase marks the 65th straight month of year-over-year gains.
Total housing inventory at the end of July declined 1.0% to 1.92 million existing homes available for sale, and is now 9.0% lower than a year ago (2.11 million) and has fallen year-over-year for 26 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.8 months a year ago.
Home purchases broken down by price bucket:
NAR's chief economist Larry Yun is getting increasingly more worried about the state of the frothy market:
“July was the fourth consecutive month that the typical listing went under contract in under one month,”... “This speaks to the significant pent-up demand for buying rather than any perceived loss of interest. The frustrating inability for new home construction to pick up means inadequate supply levels will keep markets competitive heading into the fall.”
And concluded rather stunningly:“Home prices are still rising above incomes and way too fast in many markets."... “Realtors continue to say prospective buyers are frustrated by how quickly prices are rising for the minimal selection of homes that fit buyers’ budget and wish list.”
Probably a good time to start hiking rates again and normalizing the long-end of the yield curve?