US existing home sales drop more than expected in July
Sales of existing US homes fell more than expected in July, according to data from the National Association of Realtors.
Sales were down 3.2% to a seasonally-adjusted annual rate of 5.39m, missing expectations for a much smaller drop of 0.4%.
Compared to a year ago, sales were down 1.6%.
Meanwhile, the median price for an existing home was up 5.3% from July last year to $244,100.
Total housing inventory at the end of July inched up 0.9% to 2.13m existing homes available for sale, but was still 5.8% lower than a year ago and has now declined year-over-year for 14 straight months.
Lawrence Yun, NAR chief economist, said: “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.”
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: “The consensus always looked a bit ambitious; the pending sales index pointed to a modest correction after four straight gains.
“Sales have been volatile over the past year but as far as we can tell the trend is about flat. The July dip does not mark the start of a softening trend. Indeed, the mortgage applications numbers suggest scope for sales to rise over the next few months, in contrast to new home sales, which are now overshooting the pace implied by the mortgage data.”