Existing-Home Sales in the US dropped 1.6% year-over-year in July, as inventory remained extraordinarily tight and average prices rose, again.
Selection in the market continued to dwindle, marking the 14th straight month of year-over-year declines in unsold inventory.
Even with this bump in the road, home sales are expected to finish 2016 with their highest volume since the downturn. This fact is helpful to other local retail and service industries, even propping the stagnancy of some markets. ESA’s Jake Winchell illustrates how this gradual increase in housing transactions is providing a lift to key categories, during ESA’s Top 5 Webinar on July 6.
July’s seasonally adjusted EHS (SAAR) pace dropped to 5.39M units, compared to July 2015’s 5.48M pace. This was also 3.2% decline from the 5.57M-unit pace recorded in the prior month.
July also marked the 53rd consecutive month of year-over-year increases in average price for existing-home transactions. Transactions averaged $244,100 for the month.
NAR chief economist Lawrence Yun again cited how lack of inventory and scarce new development failed to meet demand.
“Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month. Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows … Although home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring, the housing market is undershooting its full potential …”
Some quick facts about the US Housing Market for July 2016:
- SAAR: 5.39M units (-1.6% year-over-year)
- Median Pricing: $244,100 (+5.3% year-over-year)
- 53rd straight month of year-over-year price advance
- Unsold Inventory: 4.7 months (Down 5.8% from July 2015, 14 straight months)
- 47% of EHS transactions were on the market <1 month (that's high)
- First-time buyers: 32% (Down 1 pt. from June)
For more information on the US Housing Marketing visit Realtor.org’s Market Research section.
Dave Eckstein is a Partner in the firm ESA & Company. He specializes in highly profitable market share growth for local businesses and gets a kick out of demonstrating a declining cost of customer acquisition. He plays baseball, but isn't that Dave Eckstein.