Existing-Home Sales: Fourth Consecutive Decline in August
This morning's release of the August Existing-Home Sales decreased from the previous month to a seasonally adjusted annual rate of 5.35 million units. The Investing.com consensus was for 5.46 million. The latest number represents a 1.7% decrease from the previous month and a 0.2% increase year-over-year.
Here is an excerpt from today's report from the National Association of Realtors.
Lawrence Yun, NAR chief economist, says the slump in existing sales stretched into August despite what remains a solid level of demand for buying a home. "Steady employment gains, slowly rising incomes and lower mortgage rates generated sustained buyer interest all summer long, but unfortunately, not more home sales," he said. "What's ailing the housing market and continues to weigh on overall sales is the inadequate levels of available inventory and the upward pressure it's putting on prices in several parts of the country. Sales have been unable to break out because there are simply not enough homes for sale." [Full Report]
For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available from January 2014. It can be found here.
Over this time frame, we clearly see the Real Estate Bubble, which peaked in 2005 and then fell dramatically. Sales were volatile for the first year or so following the Great Recession. The latest estimate puts us back to levels reached before the recession.
The Population-Adjusted Reality
Now let's examine the data with a simple population adjustment. The Census Bureau's mid-month population estimates show a 17.3% increase in the US population since the turn of the century. The snapshot below is an overlay of the NAR's annualized estimates with a population-adjusted version.
Existing-home sales are 2.3% above the NAR's January 2000 estimate. The population-adjusted version is 11.8% below the turn-of-the-century sales.
Existing-Home Sales Median Prices
We've added a chart for the last 12 months of Existing-home sales median prices for single-family homes for reference.