Home Resales Fall

U.S. sales of existing homes declined more than expected in June (Reuters, subscription).

What’s going on: “Home sales dropped 5.4% last month to a seasonally adjusted annual rate of 3.89 million units, the lowest level since December,” according to the National Association of Realtors.

Reuters-polled economists had anticipated home resales would fall to a rate of 4.00 million units.
The median price of an existing home in June soared 4.1% from a year earlier to an all-time high of $426,900. It was the second consecutive month of record-high prices.
Prices rose in all four regions of the U.S.

Supply and sales: Housing inventory rose 3.1% to 1.32 million units in June, pushing supply up 23.4% from a year ago.

Sales nosedived 8.0% in the Midwest, widely considered the most affordable part of the country, and fell 2.1% in the Northeast and 2.6% in the West.
However, “entry-level” homes remain scarce, and “there is not enough new construction.”

Relief in sight? “The average rate on a 30-year fixed-rate mortgage dropped to a four-month low of 6.77% last week, down from 6.89% and matching the average during the same period in 2023.”

That’s down from a six-month high of 7.22% in May.
The easing is due largely to hopes that the Federal Reserve will cut interest rates in September.