Existing Home Sales “Still Sluggish” – Weakest July Since 2010, Record Low Affordability

US Existing Home Sales rose (+1.3%MoM) for the first time in five months in July, but remain down 2.5% YoY (the last time home sales were up YoY was July 2021)…

Source: Bloomberg

“Despite the modest gain, home sales are still sluggish,” said NAR Chief Economist Lawrence Yun in a prepared statement.

“But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.”

Excepot it’s not Mr. Yun!

For context, here is were existing home sales SAAR are… the weakest July print since 2010…

Source: Bloomberg

While the inventory of available homes picked up slightly in July to 1.33 million, it’s still well below pre-pandemic levels of more than 1.9 million. That represents 4 months’ supply at the current sales pace.

Yun said on a call with reporters that an almost 20% year-over-year increase in inventory indicates some homeowners are willing to surrender their 3% mortgages and list their properties.

Individual investors or second-home buyers purchased 13% of homes, down from 16% a month earlier. First-time buyers made up 29% of purchases, matching June.

The NAR’s report showed 62% of the homes sold were on the market for less than a month in July – compared with 65% in June – while nearly a quarter sold above the list price, also down from the prior month.

Properties remained on the market for 24 days on average in July, compared with 22 days in June and a further sign of softening demand.

Finally, while median existing home prices dipped very modestly MoM, they are at their highest ever for a July (up 4.2% YoY)…

Source: Bloomberg

…which leaves us wondering – what exactly does The Fed think rate-cuts are going to do to home prices (and inflation and affordability?)