• Existing home sales in the US declined to 5.08 million annualized units in June 2013 from May’s revised 5.14 million sales (initially reported as 5.18 million). Market expectations had been for sales of 5.25 million annualized units.
• The month’s supply of unsold homes rose to 5.2 from 5.0 in the previous month, but remained well below the historical average of 6.4 months, and indicative of tight supply conditions in the resale market.
• The median price of existing homes was $214,200, which was up 13.5% on a year-over-year basis as the share of distressed property sales fell to the lowest since monthly tracking began in October 2008.
• Even with the monthly moderation in June, existing home sales in the second quarter of 2013 rose an annualized 10.1% from the first-quarter average, thereby marking the eighth consecutive quarterly increase and the highest level of activity since the second quarter of 2007. Rising demand for housing amid still favourable affordability conditions and tight supplies of homes available for sale support our view that homebuilding will rebound from the softness seen in the second quarter of 2013. Accordingly, we anticipate that the ongoing improvement in residential real estate markets will continue to provide a key support to overall economic growth for the remainder of this year and into 2014.
An annualized 5.08 million existing homes were sold in the US in June 2013, which was down 1.2% from the revised 5.14 million annualized units sold in May (initially reported as 5.18 million) that had represented the highest level since the homebuyers’ tax credit boosted sales in November 2009. The moderation in resale activity in June reflected a 1.1% decrease in sales of single-family homes (to 4.50 million annualized units) in the month combined with a 1.7% decline in condo and condo sales (to 0.58 million). Existing home sales fell modestly in the West (-1.6%), Northeast (-1.6%), and South (-1.5%), while sales held steady in the Midwest.
The total number of existing homes available for sale rose 1.9% to a 10-month high of 2.19 million units in June. At the current pace of sales, it would take 5.2 months to clear this inventory of unsold homes, which would be up from 5.0 in the previous, month but still well below the historical average of 6.4 months, and indicative of tight supply conditions in the resale market. Against lean inventories and with distressed sales shrinking to their lowest share since monthly tracking began in October 2008 (down to 15% of total sales in June from 18% in May and 26% in June 2012), house prices continue to their upward trend. The US$214,200 median sales price was the highest since June 2008 and represented a 13.5% increase over the year-ago level, which was up from 12.6% in May and represented the largest gain since October 2005.
Even with the monthly moderation in June, existing home sales in the second quarter of 2013 rose an annualized 10.1% from the first quarter of 2013 average, thereby marking the eighth consecutive quarterly increase and the highest level of activity since the second quarter of 2007. Rising demand for housing amid still favourable affordability conditions and tight supplies of homes available for sale support our view that homebuilding will rebound from the softness seen in the second quarter of 2013. Accordingly, we anticipate that the ongoing improvement in residential real estate markets will continue to provide a key support to overall economic growth for the remainder of this year and into 2014.
RBC