Wednesday, September 20, 2017

NAR: "Existing-Home Sales Subside 1.7 Percent in August "

by Bill McBride on 9/20/2017 10:14:00 AM

From the NAR: Existing-Home Sales Subside 1.7 Percent in August

Existing-home sales stumbled in August for the fourth time in five months as strained supply levels continue to subdue overall activity, according to the National Association of Realtors®. Sales gains in the Northeast and Midwest were outpaced by declines in the South and West.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 1.7 percent to a seasonally adjusted annual rate of 5.35 million in August from 5.44 million in July. Last month's sales pace is 0.2 percent above last August, and is the lowest since then.
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Total housing inventory at the end of August declined 2.1 percent to 1.88 million existing homes available for sale, and is now 6.5 percent lower than a year ago (2.01 million) and has fallen year-over-year for 27 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.5 months a year ago.
emphasis added
Existing Home SalesClick on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in August (5.35 million SAAR) were 1.7% lower than last month, and were 0.2% above the August 2016 rate.

The second graph shows nationwide inventory for existing homes.

Existing Home Inventory According to the NAR, inventory decreased to 1.88 million in August from 1.92 million in July.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Year-over-year Inventory Inventory decreased 6.5% year-over-year in August compared to August 2016.  

Months of supply was at 4.2 months in August.

As expected, sales were below the consensus view. For existing home sales, a key number is inventory - and inventory is still low. I'll have more later ...