Existing home sales slipped in June,
with the blame again placed on low levels of inventory. The decline in sales, announced on Monday by
the National Association of Realtors® (NAR), was anticipated, as pending home
sales have decreased in each of the previous three months, ticking down by 0.8
percent in May.
NAR said sales of existing
single-family houses, townhouses, condos and cooperative apartments were down
1.8 percent in June, to a seasonally adjusted annual rate of 5.52 million
units, the second slowest performance of the year. The seasonally
adjusted level in May was 5.62 million units. June just managed to stay ahead of the sales
pace in June 2016, bettering it by 0.7 percent. Only the Midwest saw an increase in sales compared to May.
Analysts polled by Econoday had expected the June rate of
sales to fall between 5.500
and 5.690 million units. The consensus
was 5.58 million.

Sales of
single-family houses dipped 2.0 percent to a seasonally adjusted annual rate of
4.88 million from 4.98 million in May, remaining 0.6 percent higher than the 4.85
million pace a year ago. Existing condominium and co-op sales were unchanged
from a month earlier at a seasonally adjusted annual rate of 640,000 units
which is up 1.6 percent from the previous June.
Lawrence Yun,
NAR chief economist, says the pullback in existing home sales in June reflected
the lull in contract activity in March, April, and May. "Closings were down in most of the country
last month because interested buyers are being tripped up by supply that
remains stuck at a meager level and price growth that's straining their
budget," he said. "The demand for buying a home is as strong as it has been
since before the Great Recession. Listings in the affordable price range
continue to be scooped up rapidly, but the severe housing shortages inflicting
many markets are keeping a large segment of would-be buyers on the sidelines."
Yun added, "The good
news is that sales are still running slightly above last year's pace despite
these persistent market challenges."
The median
existing-home price for all housing types in June was $263,800, up 6.5 percent
from June 2016 ($247,600). This is a new
peak price, surpassing the record set in May. June marked the 64th
straight month of year-over-year gains.
The median
existing single-family home price was $266,200 in June and the median existing
condo price was $245,900. Those prices reflected annual increases of 6.6
percent and 6.5 percent respectively.
The number of
available homes for sale slipped again during the month, down 0.5 percent from
May to 1.96 million existing units. A year ago, the inventory was 2.11 million
and it has now fallen year-over-year for 25 straight months. The unsold inventory
is estimated at a 4.3-month supply at the current sales rate. A year ago there
was a 4.6-month supply; NAR considers six months a "balanced" market.
The tight
supply of homes continues to be reflected in short marketing period. Properties
typically stayed on the market for 28 days in June, one day more than in May,
but six days fewer than in June 2016. Short sales were on the
market the longest at a median of 102 days in June, while foreclosures sold in
57 days and non-distressed homes took 27 days. Fifty-four percent of homes sold
in June were on the market for less than a month.
"Prospective buyers who
postponed their home search this spring because of limited inventory may have
better luck as the summer winds down," said NAR President William E. Brown. "The pool of buyers this time of year
typically begins to shrink as households with children have likely closed on a
home before school starts. Inventory remains extremely tight, but patience may
pay off in coming months for those looking to buy."
First-time buyers accounted
for 32 percent of existing home sales in June, down from 33 percent the
previous month and a year earlier, while individual investors purchased 13
percent, unchanged from a year ago. Fifty-six percent of investors paid cash
for their purchases and cash sales made up 18 percent of total sales, down from
22 percent in May and in June 2016. It
was the lowest share for cash transactions since June 2009.
"It's shaping up to be
another year of below average sales to first-time buyers despite a healthy
economy that continues to create jobs," said Yun. "Worsening supply and
affordability conditions in many markets have unfortunately put a temporary
hold on many aspiring buyers' dreams of owning a home this year."
Foreclosures made up 3
percent of sales and short sales 1 percent. The aggregate of distressed sales
tied with last September as the lowest share in NAR's nine-year tracking
history.
Sales in the Midwest
posted the only regional increase, rising 3.1 percent to an annual rate of 1.32
million, the same level as a year earlier. The median price in the Midwest was $213,000, up 7.7
percent from a year ago.
The Northeast saw a 2.6
percent decline in sales compared to May, an annual rate of 760,000, and 1.3
percent higher year-over-year. The median price was $296,300, an annual
increase of 4.1 percent.
There was a 4.7 percent
decline in sales in the South, to 2.23 million, unchanged from June 2016. The median price in the South was
$231,300, up 6.2 percent from a year ago.
Existing-home
sales in the West declined 0.8 percent to an annual rate of 1.21 million but
remain 2.5 percent higher than last June. The median price in the West was $378,100, up
7.4 percent on an annual basis.