August 24, 2017 – Existing home sales provide the number of purchases made for homes, condominiums, and co-ops that have already been built. Existing home sales give an indication of demand for housing. While home resales may not generate new construction jobs like those that housing starts do, they have a similar effect on consumer spending as people purchase items for their new home.
Existing home sales fell 1.3% in July to an annualized rate of 5.440 million. This comes in well below expectations of an annualized rate of 5.565 million and below June’s downward revision of 5.510 million. Single-family homes fell 0.8% while condo sales down 4.8%. Single-family sales are up 1.7% year-over-year and multi-family are up 5.3%. The median price is at $258,300, up 6.2% from the last year. Supply fell 1.0% in July and down 9.0% from 12 months ago, the month’s supply is at 4.2 months, down from 4.8 months a year ago. The average number of days on the market was up to 30 days in July, from 28 days in June.
Similar to June’s readings, the supply decreased but prices continued to rise for the 65th consecutive month of year-over-year gains. As supply continues to fall below the 5-month benchmark we expect prices to keep rising. Home buyers are deviating from the belief that there must be at least a 20% down payment on the home to purchase it. According to the National Association of Realtors President, William Brown, about 60% of homebuyers make a 6% or less down payment on their house.