July Existing Home Sales -0.2% to 5.75M Unit SAAR
Existing home sales edged down by a m/m 0.2% in July to a 5.75M unit seasonally adjusted annual rate. The June sales pace was revised up to 5.76M from an originally-reported 5.75M, so the July sales pace matched what had originally been reported for the previous month. The median forecast for July called for a decline to a 5.70M unit pace (and our own estimate was even lower at 5.50M), so the result was better than generally expected.
The price data are mixed; we have been thinking that with the increased number of homes that were likely to come onto the market now, prices would soften in a significant manner. According to these data, this has not yet been the case.
The median price was $228,900 after $229,200 in June and $222,700 in May. The year over year change was -0.6% in July after no change in June and -2.5% in May.
Homes available for sale leaped by a m/m 5.1% to 4.592M units, representing a huge 9.6 month supply (a new cycle high) at the current sales pace. This followed 4.368M units in June, which represented a 9.1 month supply. Homes for sale are now +18.9% y/y from 3.861M units in July 2006, which represented a 7.3 months supply at the time. The trend here continues to show burgeoning new inventory, as potential sellers who had been keeping their home off the market, perhaps in hopes of seeing better prices, are now coming back into the market. This supply deluge is likely to depress prices (and probably has in real life), although the reported numbers do not yet show it. A 6.0 month supply used to be an average, but it fell to the very low level of 3.7 months as recently as January 2005, and that it is back well above a 6.0 month level, now reaching over 9.0 months, is a very good indication of the continuing slowdown in sales.