Monday, July 24, 2017

A Few Comments on June Existing Home Sales

by Bill McBride on 7/24/2017 01:06:00 PM

Earlier: NAR: "Existing-Home Sales Retreat 1.8 Percent in June"

Inventory is still very low and falling year-over-year (down 7.1% year-over-year in June). Inventory has declined year-over-year for 25 consecutive months, although the pace of decline has slowed over the two months.

I started the year expecting inventory would be increasing year-over-year by the end of 2017. That now seems unlikely, but still possible. In April, inventory was down 9.4% year-over-year, and in May, inventory was down 7.9% - and in June, down 7.1%. If that trend continues, inventory might be close to unchanged (or just down slightly) year-over-year by December.

Inventory is a key metric to watch.  More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases.

The following graph shows existing home sales Not Seasonally Adjusted (NSA).

Existing Home Sales NSAClick on graph for larger image.

Sales NSA in June (red column) were above  June2016. (NSA) - and the highest for June since 2006.

Note that sales NSA are now in the seasonally strong period (March through September).