US existing home sales beat forecasts in July

The pace of US home sales picked up unexpectedly last month, but some economists believed a slowdown was imminent.

According to the National Association of Realtors, in seasonally adjusted terms, the annual rate of existing home sales jumped in July at a month-on-month clip of 2.0% to reach 5.99m.

Economists had penciled-in an annual rate of 5.84m.

"We see inventory beginning to tick up, which will lessen the intensity of multiple offers," said Lawrence Yun, NAR's chief economist.

"Much of the home sales growth is still occurring in the upper-end markets, while the mid- to lower-tier areas aren't seeing as much growth because there are still too few starter homes available."

The number of homes available for sale meanwhile stood at 1.32m, up by 7.3% on the month albeit still down by 12.0% from a year earlier.

Unsold inventory thus ticked higher from 2.5 months' worth of sales to 2.6 months.

The median sales price for existing homes meanwhile was up by 17.8% year-on-year to $359,900.

Commenting on the latest figures, Ian Shepherdson at Pantheon Macroeconomics attributed the faster pace of sales to the increase in the number of all-cash buyers, adding that rising inventories of homes might be making it easier for some to find a house.

He also highlighted how rising inventory and unfavourable base effects were slowing price gains.

Shepherdson estimated that prices rose by 1.1% in July in seasonally adjusted terms, but only after falling 0.7% in the previous two months.

That compared to average monthly gains of 2.1% in the first quarter of 2021.

"In short, the Covid boom is over; demand is returning to its pre-pandemic level, inventory is rising, and price gains have slowed sharply."