Something really surprising just happened in the housing market
(A sign near a cluster of vacant homes in Isleton, California.REUTERS/Robert Galbraith)
Something really surprising just happened in the housing market.
Existing home sales unexpectedly rose 1.1%, to a seasonally adjusted annual rate of 5.57 million, in June, according to the National Association of Realtors.
Economists had been anticipating sales to fall 0.9%, to a seasonally adjusted annual rate of 5.53 million, according to the Bloomberg consensus.
"Sales of existing homes were unexpectedly strong in June, edging up for the fourth consecutive month to a nine-year high and defying expectations for a modest monthly decline," Zillow chief economist Svenja Gudell wrote after the data crossed. "The gain is even more surprising given a continued shortage of homes available for sale, with inventory down almost 6% compared to the same time a year ago."
"Still, limited inventory and high prices will continue to hamper a full return to a 'normal' market, especially given how good affordability is overall. This one-two punch of few homes for sale and rapidly rising prices is especially likely to impact markets in the west going forward," she added.
Sales are now up 3.0% from June 2015 (5.41 million), and remain at their highest annual pace since February 2007 (5.79 million), according to the National Association of Realtors.
"Looking ahead, it's unclear if this current sales pace can further accelerate as record high stock prices, near-record low mortgage rates and solid job gains face off against a dearth of homes available for sale and lofty home prices that keep advancing," Lawrence Yun, NAR chief economist, wrote in the report.
Notably, Trulia chief economist Ralph B. McLaughlin pointed out that although the overall sales volume is now nearing the prerecession average, there are more households in the US now than there were in the early 2000s. "As such, a lack of supply continues to hold back home buyers," he said in an email after the data crossed.
Moreover, he added that this month's supply of existing homes was the lowest since June 2005.
But "a silver lining from tight inventory is that homes are selling faster, which benefits agents and sellers. Existing home sales per agent ticked up to the highest level since June 2015," he added.
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