by Calculated Risk on 7/20/2011 10:00:00 AM

The NAR reports: June Existing-Home Sales Slip on Contract Cancellations

Total existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, declined 0.8 percent to a seasonally adjusted annual rate of 4.77 million in June from 4.81 million in May, and remain 8.8 percent below the 5.23 million unit level in June 2010, which was the scheduled closing deadline for the home buyer tax credit.
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Total housing inventory at the end of June rose 3.3 percent to 3.77 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace, up from a 9.1-month supply in May.

Click on graph for larger image in graph gallery.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in June 2011 (4.77 million SAAR) were 0.8% lower than last month, and were 8.8% lower than in June 2010.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 3.77 million in June from 3.65 million in May.

The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, so it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory decreased 3.1% year-over-year in June from June 2010. This is the fifth consecutive month with a YoY decrease in inventory.

Inventory should increase next month (the normal seasonal pattern), and the YoY change is something to watch closely this year.

Months of supply increased to 9.5 months in June, up from 9.1 months in May. This is much higher than normal. These sales numbers were below the consensus, but close to Lawler's forecast was 4.71 million using the NAR method.

Note: The NAR provided an update on the coming revisions:

[T]here will be a downward revision to sales volumes ... Preliminary data based on the new benchmark is expected to be available for review in August. ... Publication of the revisions is not likely before this fall, but we expect to provide a notice one month in advance of the publication date.