Today data showed that sales of existing homes dropped 0.7% in July. Analysts from Wells Fargo point out that total resales are now 1.5% below year-ago levels. The see that inventories remained at a low level and continue to limit overall sales and that the divide between the strengthening economy and sluggish housing market is a theme that should persist.
Key Quotes:
“Rising home prices and tight inventories continue to limit existing home sales. Total resales of existing homes once again fell short of expectations and declined 0.7 percent to a 5.34-million unit pace in July. Single-family sales fared slightly better and only experienced a 0.2 percent drop, while condos and co-ops fell 4.8 percent.”
“Home prices eased somewhat in July. After hitting a fresh new high of $276,500 in June, the median home price for a single family home fell to $272,300. Still, the median price is 4.6 percent higher than a year ago.”
“A disconnect remains between the housing sector and an overall improving economy. Employers have added over 200,000 new jobs on average in each month of the year so far in 2018 and real GDP posted a robust 4.1 percent gain in the second quarter. Despite the strong GDP print, home sales, new residential construction and renovations and repair expenditures were collectively a net drag.”
“The divide between the strengthening economy and sluggish housing market is a theme that should persist. While existing home sales should pick up from their current pace, we expect existing home sales to finish 2018 at levels slightly lower than last year.”
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