US Housing Market Lagged in June
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US home sales fell in June, posting their 3rd straight monthly decliner as a shortage of properties on the market drove house prices to a record high.
The report from the National Association of Realtors added to last week’s soft home-building data in suggesting that the housing market lagged an apparent acceleration in economic growth in Q-2.
While supply constraints have accounted for the weak sales streak, there are concerns that the higher house prices and rising mortgage rates may cause demand to slow.
Existing home sales slipped 0.6% to a seasonally adjusted annual rate of 5.38-M units last month, the NAR said. May’s sales pace was revised down to 5.41-M units from the previously reported 5.43-M units.
Economists polled had forecast existing home sales gaining 0.5% in June. Sales rose in the Northeast and Midwest. They fell in the West, which has seen a sharp rise in prices, and the South, where most of the homes are sold.
Existing home sales, which make up about 90% of U.S. home sales, dropped 2.2% from a year ago in June. They have declined on a Y-Y basis for 4 months running and decreased 2.2% in 1-H of Y 2018.
Sales are being stymied by an acute shortages of homes on the market. Rising building materials costs as well as shortages of land and labor have left builders unable to bridge the inventory gap, pushing up house prices.
The median house price increased 5.2% from a year ago to an all-time high of $276,900 in June. That was the 76th consecutive month of Y-Y price gains.
The 30-year mortgage rate is around 4.52%, according to data from mortgage finance agency Freddie Mac. In contrast, annual wage growth has been stuck below 3%.
Monday, the major US stock market indexes finished at: DJIA -13.83 at 25044.29, NAS Comp+21.67 at 7841.88, S&P 500 +5.15 at 2806.72
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