Re: Pandemic threat-level market indicators
Existing home sales lowest since January 2004
WASHINGTON (Reuters) - The pace of existing home sales in the United States fell a sharper-than-expected 4.1 percent in July to their lowest level since January 2004 as the downturn in the U.S. housing sector accelerated, the National Association of Realtors said on Wednesday.
Sales of existing U.S. homes fell for a fourth consecutive month to a seasonally adjusted annual rate of 6.33 million units in July from a downwardly revised 6.60 million unit pace in June. The July pace was 11.2 percent below the July 2005 pace of 7.13 million.
Analysts had expected home resales to slow to a 6.55 million unit pace from June's originally reported rate of 6.62 million units.
The national median existing home price for all housing types was $230,000 in July, up 0.9 percent from the July 2005, in the slowest year-on-year price gain since May 1995.
The supply of homes for sale at the end of July jumped sharply by 3.2 percent to 3.86 million units. This represented a 7.3 months' supply, the highest since April 1993.
Economists were caught off guard by the severity of the drop and said the slowdown in sales activity and the associated wealth effect on consumers could drag down the overall economy.
"This is another step down on the staircase, and we have a number of steps to go. I'd still use the word orderly, but we keep descending," said Stuart Hoffman, chief economist at PNC Financial Services Group in Pittsburgh.
He said the number could influence the Fed's future interest rate decisions because it will be a drag on economic growth.
NAR Chief Economist David Lereah said the increase in the supply of available homes so far this year was the sharpest on record.
"What we are experiencing right now is an inventory and price adjustment," Lereah said. The housing market is in transition, he said, "and there is pain in that transition."
Lereah said the slowdown represented both cooling of overheated high-priced markets and sales declines in some markets that were struggling with a slowing economy, such as Midwest manufacturing cities.
Existing home sales in West dropped 6.4 percent to an annual pace of 1.32 million in July and were down 18.0 percent from a year earlier. The July median price in the West fell 0.3 percent from a year ago to $348,000.
In the Midwest, they fell 5.9 percent to a 1.43 million unit pace, as the median price fell 0.6 to $178,000. Sales in the Northeast fell 5.4 percent to an annual sales pace of 1.05 million units as the median price fell 2.1 percent from July 2005.
Sales in the South slipped just 1.2 percent to a pace of 2.53 million units, while the median price rose 3.2 percent $192,000.
Single-family home sales dropped 5 percent to a seasonally adjusted annual rate of 5.51 million in July from 5.8 million in June. The median existing single-family home price was $231,200, up 1.5 percent from a year earlier.
Existing condominium sales, however, rose 2.8 percent to a seasonally adjusted annual rate of 818,000 units from 796,000 in June. The median condo price was $225,600 in July, down 1 percent from a year earlier.
