September 20, 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 1.7% in August to an annualized rate of 5.350 million. This comes in well below expectations of an annualized rate of 5.480 million and below July’s rate of 5.440 million. Single-family homes declined 2.1% while condo sales increased 1.7%. Single-family sales are slightly up 0.4% year-over-year and condos are down 1.6%. The median price is at $253,500, up 5.6% from the last year. Supply fell 2.1% in August and down 6.5% from 12 months ago. The month’s supply remains at 4.2 months.
Unlike July, the supply decreased, while prices also fell to $253,500 from July’s median price of $258,300. Supply continues to stay below the 5-month benchmark indicating a tight housing market. Hurricanes Harvey and Irma contributed the most to the decline in existing home sales this month. Understandably, existing home sales fell in the South 5.7% this month due to homes being destroyed from the hurricanes. Although the destruction of thousands of homes from the storms put a damper on sales, fear could possibly be playing a role as well. Potential home buyers who were looking to buy a home in Texas or Florida could have changed their mind in fear of losing their home to a storm.