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Blog: Home sales fall off in July


Could homebuyers finally be balking at the high home prices and limited choices?

July’s sales data suggests that buyers purchased fewer homes to begin the summer. Existing home sales ran at an annual pace of 5.44 million, the National Association of Realtors (NAR) reported. This was the weakest reading of the year.

flips

Sales of newly build homes also hit a seven-month low at 571,000, the slowest pace since December, the U.S. Census Bureau reported.

NAR analysts said that the slowdown was largely due to a lack of inventories, particularly at the lower-priced ends of the home market. Homes continue to sell fast. The average listing in July came off the market in 30 days, the trade group said.

There aren’t, however, enough homes for sale. The unsold inventory of existing homes fell to 4.2-months supply in July, down from 4.8 months in June and May. The inventory has fallen year over year for 26 consecutive months.

“Buyer interest in most of the country has held up strongly this summer and homes are selling fast, but the negative effect of not enough inventory to choose from and its pressure on overall affordability put the brakes on what should’ve been a higher sales pace,” NAR Chief Economist Lawrence Yun said. “Contract activity has mostly trended downward since February and ultimately put a large dent on closings last month.”

New-home market also slows

On the new-home side, the lower sales likely reflect the dearth of lower-priced offerings on the market. The median price of new homes sold during the month rose by $2,100 over the June level to $313,700, which is up from $295,000 in July 2016.

“Most of the homes coming on to the market are the higher end,” NAR analyst George Ratiu told Scotsman Guide. “They tend toward the higher-priced spectrum. As a result, the number of available buyers is probably shrinking.”

Meanwhile, new data released by Black Knight Financial Services suggests that home prices keep hitting new peaks across much of the country.

Among metros, Las Vegas, Nashville, Tenn. and Seattle have all seen prices rise by 10 percent or higher year over year, the company said. Twelve of the 20 largest states, and 21 of the 40 largest metros hit new price peaks in June, Black Knight said.  


 

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