Existing Home Sales

Sales of existing homes dipped in June 2017 according to the National Association of Realtors. Declining 1.8 percent, this latest month gave back all of May’s uptick and then some. Coming in at 5.62 million units, June’s tally is the second lowest of this year, better than only February’s count of 5.47 million. This most recent setback hurt the year-over-year tally as well, falling to just 0.7 percent from 2.7 percent a month earlier.

Despite lower transaction volumes, prices continued to march higher in the period. A median priced home set the buyers back $263,800 which surpasses May’s record. In addition to the new price peak, the year-over-year figure was positive for the 64th consecutive month. Interest rates helped the affordability of payments, contributing to rising prices. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage declined for the third consecutive month, falling to 3.9 percent in June from 4.01 percent in May. For all of 2016, the average commitment rate was just 3.65 percent.

Homes that did change hands were not for sale very long in June. Properties were on the market for an average of just 28 days, up from 27 in May but down from 34 a year earlier. This quick pace could be symptomatic of the tight supply of homes. Total housing inventory dropped 0.5 percent to 1.96 million units, a decline of 7.1 percent from a year ago. At the current transaction pace, this represents just 4.3 months of sales.
Housing could be entering into a lull. After reaching a recent peak of 15.9 percent in November 2016, the year-over-year trend has decelerated quickly during 2017. However, even with a 0.7 percent reading, this is not the worst level we’ve seen in the current expansion. In fact, this trend has dipped below zero twice since the beginning of 2015. Atlas will monitor the rate of change and note any significantly greater deterioration should one arise.