Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors) Why Investors Care
| Released on 7/25/07 For Jun 2007 | ||||||||||||
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Highlights
The worst is still not over for the housing market as existing home sales sold at an annual rate of only 5.75 million in June, down 3.8 percent from May and at an 11.4 percent year-on-year decline. Year-on-year declines have been going on for more than a year-and-a-half with the latest decline, despite an easy comparison, the steepest so far this year. Sales were down in all regions with both single-family and condo categories showing declines. The 5.75 million headline rate is the lowest since November 2002.
Supply on the market remains swollen at 8.8 months, the same as May and a key factor that will limit new construction. Interestingly, falling sales and swollen supply are not hurting prices which actually rose 3.3 percent in the month to a median $230,100. Firm asking prices are no doubt a big reason for the weak sales totals.
Treasuries firmed and the dollar eased in reaction to the report. New home sales data will be released tomorrow.
Existing home sales slipped another 0.3 percent in May to a 5.99 million annual rate to the lowest since June 2003 -- offering perhaps the clearest evidence of all of the housing slowdown. Sales are down 10.3 percent on a year-on-year basis. Most disconcerting it that supply, at 8.9 months and compared with 8.4 months in April, is at its highest since 1992. Supply overhang is weighing heavily on new construction as existing homes are a close substitute for new homes. Don't get your hopes up for June sales as recent data on mortgage applications have dipped also.
Existing home sales Consensus Forecast for June 07: 5.87 million-unit rate
Range: 5.45 to 6.09 million-unit rate
![[Chart]](chart.gif)
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Existing home sales reached a peak in mid-2005 and have been easing since. Typically, a distinct reverse relationship exists between home sales and mortgage rates. |
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