Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
 
 

Blog Home
   Brian Wesbury
Chief Economist
 
Bio
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
Bio
X •  LinkedIn
 
  Existing home sales declined 0.8% in June
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 
Implications:  Sales of existing homes fell to a seven-month low in June.  The National Association of Realtors said that cancelled contracts to buy existing homes increased to 16% in June from a more typical 9% - 10% over the past year. The NAR did not have an explanation for this spike in cancellations, but it could be due to tough credit conditions. Anyone who has taken out a mortgage lately knows the lending process can be brutal, even for those willing and able to make a down-payment of 20%.  No wonder cash transactions now account for about 29% of sales, versus a traditional share of 10%.  The silver lining in today's report was that median existing home prices are up 0.8% from a year ago and average prices are up 2.7%. Going into the second half of the year, we anticipate a rise in the pace of sales. After dropping 11.3% in April, pending home sales (contracts on existing homes) increased 8.2% in May. This should translate into a gain in closings in July. Meanwhile, worker pay is rising, job growth should be reaccelerating, mortgage rates remain very low, and home prices are extremely attractive. As a result of these factors, housing affordability remains close to all-time highs.  Meanwhile, rental vacancies are falling fast, which will eventually spur enough rent increases to make home ownership more attractive. Although the process will be slow and volatile, we still expect sales of existing homes to climb back to a long-term trend of about 5.5 million units annually.

Click here for the full report.
Posted on Wednesday, July 20, 2011 @ 11:15 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.