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Economy in Brief

U.S. Existing Home Sales Continue to Fall in July
by Tom Moeller  August 18, 2022

• Sales are lowest in over two years.

• Declines are broad-based regionally.

• Home price decline is first in six months.

Cracks in the housing market continued to be evident last month as sales & prices fell. Existing home sales declined 5.9% (-20.2% y/y) in July to 4.810 million units (SAAR) from 5.11 million in June, revised from to 5.12 million. It was the sixth straight month of decline and were at the lowest level of sales since May 2020. Sales reached a peak of 6.65 million in January 2021 and are off 27.7% since then. The Action Economics Forecast Survey expected July sales of 4.86 million units.

Sales of single-family homes fell 5.5% (-19.0% y/y) to 4.31 million units after declining 5.0% in June to 4.56 million, the lowest level since May 2020. Condo & co-op sales weakened 9.1% (-29.6% y/y) to 500,000 after falling 9.8% in June. It was the lowest level since June 2020.

Home sales declined across the country in July. The largest monthly decline occurred in the West where sales weakened 9.4% (-30.4% y/y) to 870,000 units. In the Northeast, sales declined 7.5% (-16.2% y/y) to 620,000. Sales in the South were off 5.3% (-19.6% y/y) to 2.13 million units. In the Midwest sales fell 3.3% (-14.4% y/y) in July to 1.190 million.

The number of existing homes on the market rose 4.8% (NSA) to 1.31 million, but it was unchanged y/y. The months' supply of homes on the market rose to 3.3 at the current selling rate, its highest since June 2020. It has increased from a low of 1.6 months in January of this year. These figures date back to January 1999.

The median price of an existing home declined 2.4% in July (+10.8% y/y) to $403,800 from the record $413,800 in June. Prices were highest in the West at $614,900 (8.1% y/y) and in the Northeast at $444,000 (8.1% y/y). Lower prices were found in the South at $365,200 (14.7% y/y) and in the Midwest at $293,300 (7.0% y/y). The price data are not seasonally adjusted.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's USECON database. Regional price and affordability data and national inventory data are available in the REALTOR database. The expectations figure is from the Action Economics Forecast Survey, reported in the AS1REPNA database.

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