RSS Feed by Calculated Risk on 7/22/2021 03:44:00 PM
Thursday, July 22, 2021
Comments on June Existing Home Sales
Earlier: NAR: Existing-Home Sales Increased to 5.86 million in June
Two key points:
1) Existing home sales are still somewhat above pre-pandemic levels. Seasonally adjusted (SA) sales for May were the highest since 2006, and sales Not Seasonally Adjusted (NSA) in June 2021 were also the highest since 2006.
Some of the increase over the previous eleven months was probably related to record low mortgage rates, strong second home buying, a strong stock market and favorable demographics.
2) Inventory is very low, and was down 18.8% year-over-year (YoY) in May. Also, as housing economist Tom Lawler has noted, the local MLS data shows even a larger decline in active inventory (the NAR appears to include some pending sales in inventory). Lawler noted:
Months-of-supply at 2.6 months is still very low, but above the record low of 1.9 months set in December 2020 and January 2021. Inventory will be important to watch in 2021, see: Some thoughts on Housing Inventory
Click on graph for larger image.
This graph shows existing home sales by month for 2020 and 2021.
The year-over-year comparison will be more difficult in the second half of the year.
The second graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), since 2005.
Sales NSA in June (614,000) were 21.1% above sales in June 2020 (507,000).
This was the highest sales for June, NSA, since 2006.
Also, the delay in the 2020 buying season pushed the seasonally adjusted number to very high levels over the winter. This means there are going to be some difficult comparisons in the second half of 2021!
2) Inventory is very low, and was down 18.8% year-over-year (YoY) in May. Also, as housing economist Tom Lawler has noted, the local MLS data shows even a larger decline in active inventory (the NAR appears to include some pending sales in inventory). Lawler noted:
"As I’ve noted before, the inventory measure in most publicly-released local realtor/MLS reports excludes listings with pending contracts, but that is not the case for many of the reports sent to the NAR (referred to as the “NAR Report!”), Since the middle of last Spring inventory measures excluding pending listings have fallen much more sharply than inventory measures including such listings, and this latter inventory measure understates the decline in the effective inventory of homes for sale over the last several months."
It seems likely that active inventory is down close to 40% year-over-year.
Click on graph for larger image.This graph shows existing home sales by month for 2020 and 2021.
The year-over-year comparison will be more difficult in the second half of the year.
The second graph shows existing home sales for each month, Not Seasonally Adjusted (NSA), since 2005.
Sales NSA in June (614,000) were 21.1% above sales in June 2020 (507,000).This was the highest sales for June, NSA, since 2006.
