Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors) Why Investors Care
| Released on 8/27/07 For Jul 2007 | ||||||||||||
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Highlights
Sales of existing homes held steady in July, at a slightly better-than-expected annual pace of 5.750 million vs. 5.760 million in June. Still July's rate is the lowest in nearly five years.
Supply on the market is definitely bad news, at a record 9.6 months. Supply of new homes, data released Friday, is at 7.5 months. Swollen supply will continue to pressure builders and construction payrolls. But supply continues to have only limited impact on pricing, which slipped 0.1 percent in the month to $228,900 for a year-on-year decrease of only 0.6 percent. The median price of a new home is up 0.6 percent at $239,500.
Regionally, sales of existing homes showed little variation in July, unchanged in the South where sales are concentrated. Sales in the Midwest were down slightly while sales in the Northeast and West were up slightly.
Financial markets showed no reaction to the data, which however should ease concern that the housing slowdown may deepen. In a special comment, the National Association of Realtors said subprime issues are not likely to have a dramatic impact on housing.
Existing home sales fell 3.8 percent in June to a 5.75 million unit annualized pace. June was down 11.4 percent on a year-on-year basis. Sales were down in all regions with both single-family and condo categories showing declines. The 5.75 million headline rate is the lowest since November 2002. Analysts will be closely watching the supply figure for July-June's supply stood at a swollen at 8.8 months, the same as May. The price data are not having a lot of meaning currently. Tightened lending standards have cut low end sales, boosting the median price somewhat artificially.
Existing home sales Consensus Forecast for July 07: 5.70 million-unit rate
Range: 5.60 to 5.85 million-unit rate
![[Chart]](chart.gif)
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Existing home sales reached a peak in mid-2005 and have been easing since. Typically, a distinct reverse relationship exists between home sales and mortgage rates. |
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