Mirrors the deceleration in mortgage lending:
The slip in pending home sales was no false signal as existing home sales fell 1.8 percent in June to a lower-than-expected annualized rate of 5.520 million. Year-on-year, sales are still in the plus column but not by much, at 0.7 percent which is the lowest reading since February.
Compared to sales, prices are rich with the median of $263,800 up 6.5 percent from a year ago. Another negative for sales is supply which fell 0.5 percent in the month to 1.96 million for an on-year decline of 7.1 percent. Relative to sales, supply is at 4.3 months vs 4.2 months in May.
High prices appear to be keeping first-time buyers out of the market with the group representing 32 percent of sales vs 33 percent in May and 35 percent for all of last year.
Rising prices and thin supply, not to mention low wages, are offsetting favorable mortgage rates and holding down sales. Housing data have been up and down and unable to find convincing traction so far this year. Watch for new home sales on Wednesday where general strength is the expectation.
looks like sales have gone flat since the election:
Surveys like this generally spiked up with the presidential election while ‘hard data’ releases generally decelerated:
“The seasonally adjusted IHS Markit Flash US Services PMI Business Activity Index came in at 54.2 in July 2017, unchanged from the previous month’s five-month high and slightly above market expectations of 54.1. New work increased the most since July 2015 amid an improving economic backdrop and greater willingness to spend among clients. leading to stronger job creation and a sustained rise in volumes of work outstanding. On the price front, input cost inflation eased from June’s peak while average prices charged rose the least in three months. Services PMI in the United States is reported by Markit Economics.”