Existing home sales were expected to slow down in June, however, the drop was more than forecasted. Existing homes sales fell 1.7% month over month against expectations of a 0.6% decline to 5.27 million seasonally adjusted annual rate.
Compared with a year earlier, sales in June declined by 2.2%. Sales have been declining year-over-year for 16 consecutive months.
Home purchases fell in the South, the biggest region in the US, to the slowest rate since January. Sales fell to a three-month low in the West, metro Denver home region. They increased both in the Northeast and Midwest.
One tailwind that economist would lead to a better print were falling mortgage rates. Mortgage rates have been falling steadily in recent months, always a positive trend for potential home buyers. The average interest rate on a 30-year fixed-rate mortgage in June 2019 was 3.80%, down from 4.64% six months earlier, according to data from Freddie Mac.
However, nationwide housing inventory remains relatively low, a similar issue that metro Denver has as well. There was a 4.4-month supply of homes on the market at the end of June, based on the current sales pace. A healthy market has a roughly 6-month supply of homes on the market
Larry Yun, NAR’s chief economist had this say, “It doesn’t make economic sense” that sales are refusing to break out despite job creation, rising wages, and lower mortgage rates.”
Sure it would Larry if you pulled your head out of your arse. Affordability is and will continue to be an issue for the majority of American home buyers. The median sale price for an existing home nationwide in June was $285,700, an all-time high on a nominal basis and up 4.3% from a year earlier. June’s increase marked 88 consecutive months of year-over-year price growth. Cheap money from the Federal Reserve and massive inbound immigration that both parties support have been blowing a housing bubble of epic portions that are pricing out the average American family from home ownership.