Existing Home Sales Rebound By Most Ever In June (But Miss Expectations Despite Record Low Rates)

Existing home sales were expected to play a big catch up in June after significantly disappointing in May as pending- and new-home-sales rebounded strongly from the March/April plunge during lockdowns. Existing Sales did rebound strongly – up 20.7% MoM – a record MoM rise but that was less than expectactions of a 21.4% rise and left sales down 11.3% YoY…

Source: Bloomberg

This pushed Existing Home Sales SAAR back up to 4.72mm…

Source: Bloomberg

The median existing-home price for all housing types in June was $295,300, up 3.5% from June 2019 ($285,400), as prices rose in every region. June’s national price increase marks 100 straight months of year-over-year gains.

“The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown,” said Lawrence Yun, NAR’s chief economist.

“This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

Sales for June increased in every region. Median home prices grew in each of the four major regions from one year ago.

• Sales in the Northeast rose 4.3%, recording an annual rate of 490,000, a 27.9% decrease from a year ago. The median price in the Northeast was $332,900, up 3.6% from June 2019.

• Midwest sales increased 11.1% to an annual rate of 1,100,000, down 13.4% from a year ago. The median price in the Midwest was $236,900, a 3.2% increase from June 2019.

• South sales jumped 26.0% to an annual rate of 2.18 million, down 4.0% from the same time one year ago. The median price in the South was $258,500, a 4.4% increase from a year ago.

• West sales ascended 31.9% to an annual rate of 950,000 in June, a 13.6% decline from a year ago. The median price in the West was $432,600, up 5.4% from June 2019.

But, despite record low mortgage rates, buying has not coming back as much as expected…

Source: Bloomberg

Finally, Yun concludes that significantly low inventory was a problem even before the pandemic and says such circumstances can lead to inflated costs.

“Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”

Total housing inventory at the end of June totaled 1.57 million units, up 1.3% from May, but still down 18.2% from one year ago (1.92 million). Unsold inventory sits at a 4.0-month supply at the current sales pace, down from both 4.8 months in May and from the 4.3-month figure recorded in June 2019.