Editor’s Note: Updating earlier story with more details from report.
(Kitco News) – Sales of previously owned U.S. homes fell by 3.2% in July to a seasonally adjusted and annualized pace of 5.39 million, declining for the first time since November largely due to lower inventory levels in many parts of the country, according to a report Wednesday from the National Association of Realtors.
Consensus expectations compiled by various news organizations called for sales to be around 5.5 million to 5.54 million units. The June tally was 5.57 million units.
“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,” said Lawrence Yun, NAR chief economist. “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.”
The median existing-home price for all housing types in July was $244,100, up 5.3% from $231,800 in July of 2015, the report said. July was the 53rd consecutive month of year-over-year gains.
Total housing inventory at the end of July inched 0.9% higher to 2.13 million existing homes available for sale, but is still 5.8% lower than 2.26 million than a year ago, the report said. Further, inventory has now declined year-over-year for 14 straight months. Unsold inventory is at a 4.7-month supply at the current sales pace.
“Although home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring, the housing market is undershooting its full potential because of inadequate existing inventory combined with new home construction failing to catch up with underlying demand,” Yun said.
The NAR report comes a day after the Commerce Department announced that purchases of new U.S. single-family homes last month rose by 12.4% to a seasonally adjusted and annualized pace of 654,000. This was above consensus forecasts that called for sales to be around 579,000 to 580,000.
By Allen Sykora of Kitco News; asykora@kitco.com
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