Following continued weakness in July, analysts once again hope for a rebound in home sales in August but once again they were disappointed. August existing home sales were unchanged from July’s -0.7% drop, hovering at 5.34mm SAAR – the lowest since Feb 2016.
Expectations were for a 0.5% jump in August, but printed unchanged (home sales haven’t seen a monthly increase since March)
Both single-family and multi-family units were unchanged in August as median prices dipped for the second month in a row (up 4.6% YoY still).
The West saw a 5.9% slump MoM in existing home sales as Northeast sales rose 7.6% MoM.
Inventory of available properties rose 2.7% y/y to 1.92m, which was the first increase in more than three years. At the current pace, it would take 4.3 months to sell the homes on the market, compared with 4.1 months a year earlier; Realtors group considers less than five months’ supply consistent with a tight market.
“While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” said Yun.
“Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory – especially moderately priced, entry-level homes – would propel sales.”
Hope is high for NAR however…
“There are buyers on the sidelines” ready to re-enter the market, Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.
“The housing market can turn for the better” as long as inventory continues to rise, he said.
And despite NAHB sentiment near cycle highs, home builder stocks and housing data continues to tumble…
Time for more rate-hikes, right?
“Rising interests rates along with high home prices and lack of inventory continues to push entry-level and first time home buyers out of the market,” said Yun.
“Realtors continue to report that the demand is there – that current renters want to become homeowners – but there simply are not enough properties available in their price range.”