The seasonally adjusted pace of existing-home sales in the U.S. fell 3.2 percent to an annual rate of 5.39 million sales in July. And for the first time in eight months, and only the second time in nearly two years, the rate of sales is lower on a year-over-year basis (by 1.6 percent).
As we noted last month, the rate of acceleration had been slowing. And according to the National Association of Realtors, “Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market.”
The median resale price for an existing home in July was $247,100, down a nominal $600 from June but 5.3 percent higher than at the same time last year ($231,800), while the inventory of unsold homes on the market inched up 0.9 percent to 2.13 million homes at the end of July but remains 5.8 percent lower versus the same time last year (as opposed to 66 percent higher in San Francisco).
In the West, the pace of sales actually increased 2.5 percent from June to July but remains 0.8 percent lower versus the same time last year.
Lower demand or just inadequate inventory. The “Realtors are reporting . . . .” and other comments in the article and the new home data suggest it’s an inventory problem. In other words, we’d be selling more existing homes if people could find what they are looking for and can afford.
It’s always the case with any product that if there are more and cheaper products available with a given demand curve then there will be more sales.