Existing Homes Sales Rise, But New Home Sales Drop in July

Existing Homes Sales According to the NAR
U.S. home sales rose more than expected in July, boosted by lower mortgage rates and a strong labor market, according to the National Association of Realtors.

Existing home sales rose 2.5 per cent from the prior month to an annualized pace of 5.42 million units. That came after June’s figures were revised up to show a smaller 1.3 per cent drop. Overall sales are up 0.6% from a year ago (5.39 million in July 2018).

“Falling mortgage rates are improving housing affordability and nudging buyers into the market,” said Lawrence Yun, NAR’s chief economist. Indeed, the 30-year fixed mortgage rate fell to about 3.8 per cent last month, according to Freddie Mac, down from a peak of 4.9 per cent in November.

The median existing-home price for all housing types in July was $280,800, up 4.3% from July 2018. July’s price increase marks the 89th straight month of year-over-year gains.

Properties typically remained on the market for 29 days in July, up from 27 days in June and up from 27 days in July of 2018. Fifty-one percent of homes sold in July were on the market for less than a month.

New Home Sales According to the HUD and the U.S. Census
Meanwhile, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, sales of newly built, single-family U.S. homes fell 12.8 percent to a seasonally adjusted annual rate of 635,000 units in July 2019, after a large increase in the June . It was the biggest monthly decline since July 2013. Economists had expected a sales pace of 649,000 units. On a year-to-date basis, new home sales for 2019 are 4.1 percent higher than the same period in 2018.

“New home sales were sharply revised upward in June to a post-recession high annual rate of 728,000,” said NAHB Chief Economist Robert Dietz. “While we continue to see volatility in the monthly numbers, sales continue to trend in a slightly positive direction and are in line with our forecast.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the July reading of 635,000 units is the number of homes that would sell if this pace continued for the next 12 months.

The inventory of new homes for sale was 337,000 in July, representing a 6.4 months’ supply. The median sales price was $312,800. The median price of a new home sale a year earlier was $327,500

Regionally, and on a year to date basis, new home sales are 7.2 percent higher in the South and 9.5 percent higher in the West. Sales are down 15.4 percent in the Northeast and 12.4 percent in the Midwest.