Economist's Insights

Existing Home Sales Data Continues to Exhibit Affordability Headwinds

Aug 24, 2017

The National Association of Realtors’ (NAR) reported below-estimate sales of existing homes for July. Sales declined 1.3% MoM to a 5.44MM unit annualized pace, the slowest since August 2016. The result well short of economists’ forecast of a 0.5% gain and capped off a disappointing week for the housing series. Data Wednesday showed new home sales fell 9.4% MoM in July. The details of the NAR’s existing home data showed a continuation of the theme that prospective buyers are facing affordability and selection issues. Demand remained steady. The average contract was signed within 30 days of the initial listing for a fourth month. But inventories tightened again. On a YoY basis, inventories were down 9.0% and contracted for a 26th consecutive month. Persistent demand and falling inventories helped the median price rise 6.2% from a year ago. The average YoY pace for price gains in 2017 held at 6.5%, the strongest annual pace since 2013.