July Existing Home Sales Drop for Fourth Straight Month

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The National Association of Realtors (NAR) reported Wednesday morning that the seasonally adjusted annual rate of existing home sales in July decreased by 0.7% to a seasonally adjusted annual rate of 5.34 million from a rate of 5.38 million in June.

The July decrease followed a 0.6% decline in June sales and leaves existing home sales down 1.5% year to date compared with 2017. The consensus estimate called for sales to reach 5.425 million, according to a survey of economists polled by Bloomberg.

In 2017 existing home sales rose 1.1% year over year, the best level in 11 years. The seasonally adjusted annual rate came in at 5.51 million, the highest since posting 6.48 million in 2006.

The NAR’s chief economist, Lawrence Yun, said:

Led by a notable decrease in closings in the Northeast, existing home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million. Too many would-be buyers are either being priced out, or are deciding to postpone their search until more homes in their price range come onto the market.

Housing inventory decreased by 0.5% in July to 1.92 million homes, equal to a supply of 4.3 months, unchanged compared with July.

According to the NAR, the national median existing home price for all housing types in July slipped to $269,600, a drop of $7,300 compared with an all-time high of $276,900 median in June. Home prices have now risen on a year-over-year comparison basis for 77 consecutive months.

The percentage of first-time buyers rose by a point month over month at 32%. For all of 2017, first-time buyers accounted for 34% of sales, down one percentage point compared with 2016.

Sales of single-family homes fell 0.2% from the June total of 4.76 million to a seasonally adjusted annual rate of 4.75 million and are down 1.2% compared with July 2017. Sales of multifamily homes plunged 4.8% in July to a seasonally adjusted annual rate of 590,000 units.

All homes were on the market for an average of 27 days in July, up by one day month over month and down from 30 days in June 2017. Foreclosure (2%) and short (1%) sales accounted for 3% of all July sales, unchanged compared with the prior month and down from 5% in July 2017. The percentage of distressed sales remains at its lowest level since the NAR began tracking it in October 2008.

The NAR also reported the following regional data:

July existing home sales in the Northeast tumbled 8.3% to an annual rate of 660,000 and are down 1.5% compared with July 2017 sales. The median price in the Northeast was $309,700, up 6.8% compared with July of last year.

In the Midwest, existing home sales fell 1.6% to post an annual rate of 1.25 million in July and are down 0.8% compared with the July 2017 rate. The median price in the Midwest was $210,500, up 2.5% from a year ago.

Existing home sales in the South slipped 0.4% in July to an annual rate of 2.24 million and are down 0.4% compared to July 2017 sales. The median price in the South was $233,400, up 2.7% from a year ago.

Existing home sales in the West rose 4.4% to an annual rate of 1.19 million in July and are down 4% compared with July 2017 totals. The median price in the West was $392,700, up 5.1% compared with the July 2017 median.