Existing Home Sales Decline Third Month Despite Rising Inventory


Existing home sales declined for the third month, fourth year-over-year. May sales were revised lower.

The National association or Realtors (NAR) reported existing home sales for June at 5.38 million homes seasonally-adjusted annualized (SAAR). The NAR revised may sales lower to 5.41 million from 5.43 million.

The Econoday consensus was that home sales would rise slightly in June to 5.44 million.

Three-Month Losing Streak

Mortgage News Daily notes Sales Down Despite Increasing Inventory.

Existing home sales extended their losing streak to three months in June.  The National Association of Realtors® (NAR) said that single-family homes, townhomes, condominiums, and cooperative apartments sold during the month at an annual rate that was 0.6 percent below that of the previous month and lagged sales in June of last year by 2.2 percent.

Single-family home sales were also down 0.6 percent, to a seasonally adjusted annual rate of 4.76 million units from 4.79 million in May. This puts the rate 2.3 percent lower than the 4.87 million pace a year ago. Existing condominium and co-op sales were unchanged from June at a rate of 620,000 units and represent a 1.6 percent loss compared to the previous June.

Lawrence Yun, NAR chief economist, said June was the fourth straight month sales were lower on a year-over-year basis. "There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining," he said. "The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation's housing market. What is for sale in most areas is going under contract very fast and in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales."

No Housing Shortage

Yun repeats the same nonsense every month. There is no housing shortage. If there was a genuine shortage, builders would build homes like mad.

Rather, there is a shortage of houses that people can afford, a different matter.

Home Prices Rise 76 Straight Months

The median existing-home price for all housing types in June was $276,900, surpassing May as the new all-time high and up 5.2 percent from the June 2017 median of $263,300. It was the 76th straight month in which prices surpassed those a year earlier. The median existing single-family home price was $279,300, up 5.2 percent from June 2017 and the median condo price gained 4.9 percent to $258,100.

Inventory Rising

The inventory of existing homes did increase in June, climbing 4.3 percent to 1.95 million units. This is 0.5 percent above the level in June 2017 and marks the first time the inventory has grown year-over-year since June 2015. The unsold inventory is estimated to be a 4.3-month supply at the current sales pace, up from 4.2 months the previous June. The increase in inventory did not affect marketing time which was typically 26 days in June, unchanged from the previous three months and two days shorter than in June 2017. Fifty-eight percent of homes sold in June were on the market for less than a month.

"Realtors® throughout the country continue to stress that there's considerable pent-up demand for buying a home among the millennial households in their market," said Yun. "Unfortunately, they're just not making meaningful ground, and continue to be held back by too few choices in their price range, and thereby missing out on homeownership and wealth gains."

Strong Demand for Below Market Stuff

There is an unlimited demand for "free" stuff and a strong demand for below market stuff.

Yun continually blames "lack of inventory". This month it rose. Home sales fell anyway.

Root Cause

Yun misses the mark by a mile on the root cause of his alleged crisis. The root cause of this mess is Fed policy.

The Fed's expansionary policies bailed out the banks and created numerous asset bubbles. The economists do not properly factor rising asset prices, especially housing into there consumer price inflation (CPI) models.

Yun seriously needs to get a grip on reality, but that is like asking dedicated vegans to have a T-Bone steak for dinner.

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It's looking increasingly likely that housing has peaked this cycle.

Mike "Mish" Shedlock

Comments (7)
No. 1-7

Ruh roh. Around here, crack shacks start around $300K, whereas decent starter homes are half a mil. I know some people who paid $850K for a house that couldn't pass code, had to pump in another 50 for renovations. Know other people who paid $1.4M for a teardown because they like the location. Once the demo is complete, they'll pay at least few hundred more to build the new house.

Yun is counting on 20-somethings to keep this bubble going? Ha!


Rising interest rates + DJT's new tax laws + QE unwind = the pop of the housing bubble


Technically, Yun is certainly right that there is a housing shortage.

If you use the number of houses owned, for own use, by those who can afford to own as many as they feel like, then extrapolate this to the rest of the population, we're likely a billion or more dwellings short of any kind of natural saturation point.

Doubt a consummate halfwit by professional allegation, like Yun, have ever stopped to even consider this, but.... even broken clocks are right sometimes.


Homes are still selling within hours or a few days in Colorado Springs. I continue to be astonished at the frothiness here and wonder where else this is happening and how fast it will implode when the market suddenly reverses.


I left mid-peninsula (SF) and California when the rent for my 650 sq ft 1 br 1 ba apartment went to $2000 a month. A newly completed apartment complex just opened up a year since I moved and its 671 sq ft 1 br 1 ba apartment is going for $3800. Well, it is new. But it doesn't have any parking. You are supposed to walk and take the train and mooch rides from friends who have a car. The apartment house is Trestle by Prometheus in San Carlos. Look it up since you don't believe me.


The issue is a lack of affordable inventory that is limiting sales numbers. Housing prices have pushed out most working class buyers to the point they may never own a home without tremendous fiscal discipline. Housing prices in large metro areas far outpace rural areas where jobs are limited.

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