US Existing-Home Sales Slow to Weakest Pace 2+ Years

News from S&P Global Market Intelligence

U.S. existing homes slumped to their slowest pace in more than two years, unexpectedly declining for the fourth straight month in July amid persistently high prices and weak supply, the National Association of Realtors reported.

Total existing-home sales fell 0.7% to a seasonally adjusted annual rate of 5.34 million in July from 5.38 million in June. Year over year, sales were down 1.5%.

Econoday projected sales to bounce back last month and rise to 5.42 million.

Single-family home sales slipped 0.2% month over month to 4.75 million, and sales of condominiums and co-ops declined 4.8% to 590,000 units.

The West was the only major region that posted higher sales last month, while the Northeast led the decrease in sales with an 8.3% drop.

National Association of Realtors Chief Economist Lawrence Yun noted that continually increasing home prices have steadily hurt demand.

The median existing-home price for all housing types was $269,600 in July, up 4.5% from a year ago and marking the 77th straight month of year-over-year price increases.

"Too many would-be buyers are either being priced out or are deciding to postpone their search until more homes in their price range come on to the market," Yun said, adding that home sales have also cooled partly due to the spike in mortgage rates earlier this year.

"This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market," Yun said.

Existing homes are selling at the slowest pace since February 2016, when sales stood at 5.21 million, according to Yun.

Total inventory at the end of July fell 0.5% to 1.92 million existing homes.

"Listings continue to go under contract in under [a] month, which highlights the feedback from realtors that buyers are swiftly snatching up moderately priced properties," Yun said. "Existing supply is still not at a healthy level, and new home construction is not keeping up to meet demand."