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 1.3% in July
Posted Under: Data Watch • Home Sales • Housing
Supporting Image for Blog Post

 

Implications:  Existing home sales fell modestly in July as high prices and a lack of selection continued to inhibit would be buyers.  Sales of previously-owned homes fell 1.3% in July to a 5.44 million annual rate, but are still up 2.1% from a year ago.  Home sales are volatile from month to month, but we expect the general upward trend of the past several years to keep going.  One major headwind for sales has been the decline in inventories, which have now fallen on a year-over-year basis for 26 consecutive months and are down 9% from a year ago.  The inventory of single-family homes is now the lowest for any July since 1994.  This has also affected the months' supply of existing homes – how long it would take to sell the current inventory at the most recent sales pace – which was 4.2 months in July, down from 4.8 months a year ago.  According to the NAR, anything less than 5.0 months is considered tight supply, a benchmark which hasn't been exceeded since November 2015.  Despite the lack of options, demand for existing homes has remained remarkably strong, with July marking the fourth consecutive month where a typical listing was sold in under 30 days.  Higher demand and a shift in the "mix" of homes sold toward more expensive properties has also driven up median prices, which have now risen for 65 consecutive months on a year-over-year basis.  The strongest growth in sales over the past year is heavily skewed towards the most expensive homes, signaling that supply constraints may be disproportionately hitting the lower end of the market.  Tough regulations on land use raise the fixed costs of housing, tilting development toward higher-end homes.  The NAR suggests that strong demand could also be pushing some properties into higher brackets as multiple offers boost final sales prices.  Although some analysts may be concerned about the impact of higher mortgage rates, it's important to recognize that rates are still low by historical standards, incomes are growing, and the appetite for homeownership is eventually going to move higher again.  On the employment front this morning, initial jobless claims rose 2,000 to a still low 234,000, while continuing claims remained unchanged at 1.95 million. It's still early, but plugging these figures into our models suggests a nonfarm payroll gain of 189,000 in August, another solid month. 

Click here for PDF version

Posted on Thursday, August 24, 2017 @ 11:24 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.
Search Posts
 PREVIOUS POSTS
New Single-Family Home Sales Fell 9.4% in July
Third Quarter Real GDP – 3.8%!
M2 and C&I Loan Growth
Let the Private Sector Take the Reins on Infrastructure
Industrial Production Rose 0.2% in July
Housing Starts Declined 4.8% in July
Retail Sales Increased 0.6% in July
Consumers Are Doing Fine
M2 and C&I Loan Growth
North Korea and Stocks
Archive
Skip Navigation Links.
Expand 20242024
Expand 20232023
Expand 20222022
Expand 20212021
Expand 20202020
Expand 20192019
Expand 20182018
Expand 20172017
Expand 20162016
Expand 20152015
Expand 20142014
Expand 20132013
Expand 20122012
Expand 20112011
Expand 20102010

Search by Topic
Skip Navigation Links.

 
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.