US Home Sales Fall, Prices Rise to Record Highs

US Home Sales Fall, Prices Rise to Record Highs

US Home Sales Fall, Prices Rise to Record Highs

$DIA, $SPY, $QQQ, $VXX

US home resales volumes fell more than expected in June as a dearth of properties pushed house prices to record highs.

The National Association of Realtors said Monday existing home sales dropped 1.8% to a seasonally adjusted annual rate of 5.52-M units last month.

May’s sales pace was unrevised at 5.62-M units. Economists polled had forecast sales falling 1.0% to a 5.58-M-unit rate.

Sales were up 0.7% from June 2016.

An acute shortage of properties has hampered monthly sales. The shortage of properties has led to bidding, culminating in house price increases outpacing wage gains.

Last month, the number of homes on the market slipped 0.5% to 1.96-M units. Supply was down 7.1% from a year ago. Housing inventory has dropped for 25 straight months on a Y-Y basis.

As a result, the median house price jumped 6.5% from a year ago to an all-time high of $263,800 in June. It was the 64th month running of Y-Y price increases.

Prices for US Treasuries bonds slipped while USD rose slightly against a basket of currencies after the data was published.

US Homebuilders are struggling to plug the inventory gap amid rising costs of lumber and other materials.

Homebuilding is also being constrained by shortages of labor and land.

A report last week showed housing starts rebounding 8.3% to a 1.22-M-unit pace in June, but still below their historic average of 1.5-M units, a rate realtors say would eliminate the housing shortage.

The 2 reports suggest that housing subtracted from gross domestic product in the second quarter after contributing almost half a percentage point to the economy’s annualized 1.4% growth pace in Q-1 of this year.

Demand for housing is being driven by a tight labor market, marked by a 4.4% unemployment rate, which is boosting employment opportunities for young Americans. But the tight labor market has not spurred faster wage growth.

Annual wage growth has struggled to break above 2.5%, sidelining 1st-time home buyers, whose share of home sales has barely shifted. They accounted for 32% of transactions last month, well below the 40% share that economists and realtors say is needed for a robust housing market.

Monday, the major US stock market indexes finished at: DJIA -66.90 at 21513.17, NAS Comp +23.05 at 6410.77, S&P 500-2.63 at 2469.92

Volume: Trade on the NYSE came in at 821-M/shares exchanged.

  • NAS Comp +19.1% YTD
  • S&P 500 +10.3% YTD
  • DJIA +8.9% YTD
  • Russell 2000 +6.0% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.21) Neutral (-0.03) Neutral (0.17) Very Bullish (0.50)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.28) Bullish (0.25) Bullish (0.35) Bullish (0.25)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Neutral (0.23) Bullish (0.33) Bullish (0.29) Neutral (0.06)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.42) Bearish (-0.33) Bearish (-0.46) Bearish (-0.46)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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