The reading on existing-home sales, or used-home sales, managed to post another gain in June. The reading for June was 4.89 million units on an annualized basis, which is above the 4.72 million reported in May and was slightly ahead of the Dow Jones consensus estimate of 4.85 million. On a percentage basis that comes to +3.6% for June, after a +1.3% reading in May. Prices are still down sharply, but the distressed sales look lower as well.
The National Association of Realtors had originally reported that the May sales were up by some 2.4% to 4.77 million.
Foreclosures and short sales came to 31% of existing home sales in June and the median price for existing homes was down 15.4% from a year ago to $181,800 per unit. This is on top of 30-year mortgage rates being a half percent higher than last month and with tighter credit being available to fewer qualified buyers. We won’t even make the definite reminders of the jobs situation.
Compared to last year these figures were down 0.2% for the units counted. But the number of existing homes measured as inventories also fell by about 0.7% to some 3.82 million units for sale. This figure comes to a supply of some 9.4-months, down from a supply of 9.8 months in May.
When you see the drop in prices, it is hard to get excited in general. But there is hope as the level of distressed selling is getting to manageable levels.
Now we just have to hope that the shadow supply of houses that will come on the market or that have been foreclosed by banks that are not yet on the market (or being held off the market) is not as high as many fear. There is also the notion to contend with that the gains are off of levels so low with such low prices that this good news just represents a scolding rather than a lashing.
Jon C. Ogg
July 23, 2009
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