Existing Home Sales July 2018

Existing home sales suffered a decline in July 2018 according to the National Association of Realtors.  Dropping 0.7 percent, this housing market indicator has fallen for four consecutive months.  July’s tally now posts the slowest transaction pace in over two years.

Three of the four regions worsened in the period.  Transactions in the Northeast fell 8.3 percent, causing the year-ago comparison to fall 1.5 percent.  Midwest sales fell 1.6 percent and are now 0.8 percent lower than in the same period last year.  Southern data wasn’t much better; dropping 0.4 percent in July, this largest region has also declined 0.4 percent from a year ago.  Only transactions in the West improved in the period, rising 4.4 percent.  However, volumes on the left side of the nation are 4.0 percent lower than 12 months ago.

Price measures suffered in the period as well but remain higher on a year-over-year basis.  Average priced homes set buyers back $307,800 which is down from $311,900 in June; notwithstanding this decline, the price proxy is 3.0 percent higher than a year earlier.  The median-priced home was $269,600 and down from $273,800 in June; still, from a year ago, the price estimate is up 4.5 percent.

Interest rates cooperated with buyers in the period.  According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.53 percent from 4.57 percent in June.  For some context, the rate averaged 3.99 percent in all of 2017. 

Inventories remained virtually unchanged.  There are roughly 1.92 million units for sale, which matches the year-ago tally but is 10,000 units lower than in June.  At the most recent pace of sales, this represents a 4.3-month supply, matching both the prior month and year-ago totals.

Housing is becoming a weak link in the indicators Atlas follows.  Four consecutive months of falling transaction volumes is not encouraging.  However, it hardly indicates a problem with the overall economy.  There are plenty of positive data points being released about America’s consumers and output in general.  Housing was hit hard during the Great Recession, and the marketplace is still trying to find a sustainable equilibrium, even as the rest of the economy looks solid.