Sales of Existing Homes Advance, Inventories Flat, and Prices Falling Less Rapidly
Sales of all existing homes rose 7.2% to an annual rate of 5.24 million units during July, marking the fourth consecutive monthly gain. Purchases of existing single-family homes increased 6.5% to an annual rate of 4.61 million units. Sales of existing single-family homes have now risen 13.8% from the record low of 4.05 million units in January 2009. The $8000 tax credit is believed to have contributed to the increase sales of existing homes.
The median price of an existing single-family home dropped 2.0% in July from the prior month to $178,300. The median sales price of an existing single-family home is down 14.7% from a year ago. This represents an improvement from the record 16.9% drop recorded in April of 2009.
Seasonally adjusted inventories of existing single-family homes were virtually flat (8.24 months supply) compared with the situation in June (8.26 months supply). The peak of the inventories-sales ratio occurred in January 2009 (13.3 months). The median inventories-sales ratio is 7.2-month supply, which implies that the inventories sales ratio needs to make a significant breakthrough to match the historical median. In sum, the housing sector continues to present a fragile recovery, at the least.
