We just received existing home sales data for June. Here’s what the numbers looked like:
* Existing home sales fell 5.1% to a seasonally adjusted annual rate of 5.37 million in June from 5.66 million in May. That was moderately better than forecasts for a sales rate of 5.1 million.
* Regionally, sales fell in the majority of the country. They dropped 6.5% in the South, fell 7.5% in the Midwest, and tanked 9.3% in the West. Sales rose 7.9% in the Northeast. By property type, single family sales dropped 5.6% while condo and coop sales slipped 1.5%.
* The raw number of homes for sale rose 2.5% to 3.992 million from 3.893 million in May. That was also up 4.7% from year-ago levels. The months supply at current sales pace indicator of inventory shot up to 8.9 from 8.3, led by deterioration in the single family market. Median prices rose 5.2% to $183,700 from $174,600 a month earlier. They’re up 1% from the year-ago level.
The housing market continues to struggle in the wake of the tax credit expiration. Sales fell in most of the country in June, while the inventory of homes on the market rose. Home prices were roughly unchanged from year-ago levels, but pricing tends to lag other indicators when conditions head south. Another bout of home price deterioration appears likely, though it’ll be much more gradual than what we’ve seen to date.
I’ve said it before and I’ll say it again: The labor market is absolutely key to the health of housing. Bargains abound in the residential real estate market. But many buyers lack the confidence or the income to take advantage of them. Fed Chairman Ben Bernanke recently forecast a lengthy period of high unemployment. I can’t argue with that outlook, and that’s why I’m not looking for a robust housing recovery.
{ 2 comments… read them below or add one }
Hello Mike, Enjou reading your atricles. Just read the article on credit. I believe you overlook a very important point in you analysis. How many people have gone through foreclosures or sold their properties for just enough to get out from under them in the last 5years. They are the ones who need loans but cannot get them. The people who can get loans really don’t need them. They are convience loans. Don’t forget what part of our income level keeps our economy moving? Thanks Al
Reagarding your current article “wheres the credit (beef) you are correct about consumers deleveraging. Can you imagine, that after 30 years of gov’t policy to encourage debt, after the largest debt/easy money induced credit crisis and after the biggest debt defaults in history….its iseasy to understand that maybe the consumer learned a little from this financial malfeasance. Yet, our gov’t is still encouraging a financially strapped consumer to spend! The govt wants to see debt grow and consumers spend. Heck, they need about a 3-5 year hiatus to catch up, let debt levels recede to normal levels (in comparison to income). All debt does is accelerate purchases spending from a later date save and use cash purchase to an earlier date purchase and pay later.
Simple solution. Get the government out of the economy. Stop attemting to accelerate and decelearate with fiscal and monetary stimulus. Let us return to ea real economy.
Why wont businesses spend today? They are clueless to real demand? They cannot separate artificial demand (fiscal $$) from real demand. So, they are going to wait and see. Its prudent to do just that.
What a mess. Solutions so easy…but they involve sacrifice, lower standard of living, etc. American people would buckle up and handle. But politicians want to keep eating ice cream instead of spinach.