USA home resales fell more than expected in July after four straight months of strong gains as a lack of inventory limited choice for buyers, but further gains in prices suggested the housing market remained on solid ground.
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Existing home sales-including single-family homes, town homes, condominiums and co-ops- fell 3.2% in July to a seasonally adjusted annual rate of 5.39 million, according to a National Association of Realtors release Wednesday morning. It was the first time sales had decreased since February.
Compared to a year ago, sales were down 1.6%.
“I believe that demand is not going away – it’s just lack of excitement because of a lack of inventory,”Lawrence Yun, chief economist at the Realtors group in Washington, told reporters as the data were released”.
News Corp, owner of The Wall Street Journal, also owns Move Inc., which operates a website and mobile products for the National Association of Realtors.
The median home sales price was $244,100 in July, up 5.3 percent from a year ago. July’s pace of existing home sales was 1.6% below June 2015 – marking only the second time in almost two years that sales declined year over year. A six-month supply is viewed as a healthy balance. Unsold inventory is at a 4.7-month supply at the current sales pace, up from the 4.5 months in June.
The number of listings has tumbled 5.8 percent from a year ago to 2.13 million, meaning that would-be homebuyers are struggling to find attractive properties in their price range and may be delaying their purchases. The share of first-time buyers in the US slipped to 32% in July, down from 33% in June.
Fewer homes are coming onto the market, putting a cap on the sales growth enjoyed earlier this year thanks in part to a low mortgage rate and brightening job market. First-time home buyers accounted for 32 percent of transactions in July, up from 28 percent a year ago. Still, the pace is well below the peak reached in 2005 when more than 7 million properties were sold. Sales of new homes climbed 12.4 percent last month to a seasonally adjusted rate of 654,000 annual units, the strongest level since October 2007, the Commerce Department said Tuesday. And in some markets, with especially low unemployment, inventory is even tighter. Rising demand for homes is a positive.
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“Home-price growth is outpacing rent growth”, Mr. Yun said. Such strong price appreciation makes it harder for renters to become owners, Yun noted.
