KEY MARKET INDICATORS as of Sept 4, 2018
July Home Sales
Existing home sales reported a seasonally adjusted annual rate of 5.34 million units in July, a decrease of 0.7% from the June figure. The lack of inventory is one reason for slowing home sales. The inventory level decreased by less than 1% to 1.92 million units in July, implying a supply of 4.3 months at current sales pace, unchanged from a year ago. A balanced market is one with around 6 months of supply, so the current market remains a seller’s market. Historically, a seller’s market implies rising home prices. The latest data from the Federal Housing Finance Agency shows that home prices in June are 6.5% above the level a year ago.
The housing market is highly seasonal. May to August are peak home-selling months, which generate more home sales than other months of the year. But in the past few years, spring and fall have produced higher-than-expected home sales under normal seasonality while summer has produced fewer. If that pattern continues, we may see a rebound in home sales in September and October.
New home sales reached a seasonally adjusted annual rate of 627,000 units in July, a decrease of 1.7% from the revised June figure. Compared to a year ago, new home sales were up 10% – largely because of weaker sales in the year ago period. The median sales price for new homes was $328,700 in July, an increase of 2% from a year ago. As homebuilders increase production, the median price of new homes is growing at a slower pace than the median price of existing homes, making new homes more attractive to homebuyers.