US

US Existing Home Sales Climb, But Inventory Is Climbing Even Faster

American home sales broke their losing streak last month, with sales finally climbing. National Association of Realtors (NAR) data shows existing-home sales jumped in June. The increase breaks the declining trend over the past 4 months, which has seen sales slip lower. At the same time, inventory climbed even more quickly than sales. Inevitably this should lead to slower price growth, but not last month. Prices still advanced. By a lot. 

Existing-Home Sales Break 4-Month Losing Streak

US existing-home sales came in higher last month, breaking the volume losing streak. The seasonally adjusted annual rate (SAAR) for home sales reached 5.86 million in June, up 1.4% from a month before. Compared to a year before, sales are now 22.9% higher. It was the first month since January to see home sales rise, but the volume is still below the peak seen this past March. 

US Existing-Home Sales

The seasonally adjusted annual rate (SAAR) of existing-home sales in the US.

Source: NAR; Better Dwelling.

All but one region has seen increases in home sales on a monthly basis. Increases were observed in the Northeast (2.8%), Midwest (3.1%), and West (1.7%). As for the South, home sales were flat. The last one is worth watching if you’re in the region. Home sales there stalled at the lowest level since August of last year.

US Existing-Home Sales By Region

The monthly percent change in the seasonally adjusted annual rate (SAAR) of existing-home sales for May, broken down by region.

Source: NAR; Better Dwelling.

US Home Sellers Increased Faster Than Buyers

The number of people looking to sell is also on the rise these days, with inventory jumping to a multi-month high. There were 1.25 million homes listed for sale in June, up 3.3% from a month before. Compared to a year ago, it’s l8.8% lower than that period. Annual comparisons may not be all that helpful, due to the base effect. The amount is still the highest level since November 2020 though.

Months of Inventory Rises To Highest Level Since June

The market isn’t exactly overflowing with inventory, but it’s not nearly as tight as it was a few weeks ago. NAR reported 2.6 months of inventory in June, 4.0% higher than the month before. It was the most inventory seen since September 2020, back when price growth was a little slower. 

Most of US Home Price Gains Happened From January

Was, being the keyword in regards to slower price growth, because it certainly isn’t the case today. The median home price reached US$363,300 in June, up 23.4% from a year before. Annual growth is huge, but this is really two different halves of the year. In the first half, from last June to December 2020, home prices climbed 5%. Over the next six months ending in June 2021, prices launched another 17.49% higher. 

US existing-home sales climbed higher, but inventory is now rising even faster. Inevitably this should provide a little relief from the rapid price growth. Though it didn’t do much last month, which was likely carried by the massive momentum this year. 

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7 Comments

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  • PK 2 months ago

    Imagine living in a country where $400k is “expensive” for housing? Can’t find much for less than $800k in Canada now, and even then it’s not particularly nice and far from the cities.

  • Omar 2 months ago

    off the top of your head, does anyone know if this is the same situation with Canada, where most of the gains are from January on? Because that’s a heck of a coincidence if both regions saw prices inflation, and cool down in March as well.

  • Ghl 2 months ago

    Is inventory growing faster than money printing? If not, prices will keep going up.

    • DDD 2 months ago

      not in the United States, all data shows that prices either going to be in stagnation or even drop

  • D 2 months ago

    What happens when the vast majority (90%) are priced out from buying a home and have to resort to a 30 year mortgage? Will the banks expand the money supply thus increasing prices thus turning those 30 year mortgages into 50 year, 100 year for others that didn’t get in early etc…?? Where’s the ceiling? Is it infinite? Why do we have a central bank if they aren’t deflating this horrible bubble that will destroy our economy? Look at Japan. Japan’s gdp today is less than its GDP in 1995, in NOMINAL TERMS. Adjusted for inflation, Japan’s economy has tanked for the last 26 years. Is this our future??? Why isn’t the central bank doing anything?

    • flipg 2 months ago

      They are afraid to act because whoever is in power when the bubble pops will soon be out.

      • Tony 2 months ago

        Which party is in power will keep kicking this can down the road for as long as they can till some unforeseen event happens that knocks this house of cards down. Then they can say well it wasn’t our fault and, there was nothing that could be done and, no way we could see such an event coming….. blah blah blah. Will there be some unfortunate people who lose their shirt? Of course there will. Will there be some lucky schmucks who cash out before this? Sure. What ever happens, engineered or not, it will appear as complete surprise and shock that will rock the real estate markets…. Maybe that’s the great reset that everyone is talking about.

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