Existing Homes Prices Up 88th Month: NAR Can't Figure Out Why Sales Are Down

-edited

NAR Chief Economist Lawrence Yun is scratching his head. He wonders why sales are weak. Duh?

The National Association of Realtors reports Existing-Home Sales Falter 1.7% in June.

Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 1.7% from May to a seasonally adjusted annual rate of 5.27 million in June. Sales as a whole are down 2.2% from a year ago (5.39 million in June 2018).

“Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country,” said Lawrence Yun, NAR’s chief economist. Yun says the nation is in the midst of a housing shortage and much more inventory is needed. “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” he said.

Yun said other factors could be contributing to the low number of sales. “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure. It’s too soon to know how much of a pullback is related to the reduction in the homeowner tax incentive.”

Duh?

The median existing-home price for all housing types in June reached an all-time high of $285,700, up 4.3% from June 2018 ($273,800). June’s price increase marks the 88th straight month of year-over-year gains.

Hello Yun

Hello Mr. Yun. Did it occur to you for even a fleeting moment that people cannot afford homes, that prices have outstripped wages since 2012?

A chart of mine just might help.

Housing Bubble Reblown

Dear Lawrence Yun, please consider Housing Bubble Reblown: Last Chance for a Good Price Was 7 Years Ago

Instead of wondering why sales are so low, Yun ought to be thankful that home sales are as good as they are.

Yun ponders "lack of confidence" but buying at these levels actually suggests "overconfidence"

Mike "Mish" Shedlock

Comments (27)
No. 1-14
Sechel
Sechel

seemed obvious that if sales are down and home prices are up. the market is bifurcated. Are more sales occurring in the high end?

Tony Bennett
Tony Bennett

In 2006 I thought RE was waayyy out of whack.

I asked 2 RE agents (different markets but each had 20+ years of experience) their thoughts. Channeled each other with ~ market will plateau for a year or two till "fundamentals" catch up ... then onward and upwards.

Years later one had the nerve to tell me that things were "crazy" then and knew correction coming.

Mish
Mish

Editor

"seemed obvious that if sales are down and home prices are up. the market is bifurcated. Are more sales occurring in the high end?"

Your answer:

Carlos_
Carlos_

Mish you should send the wages vs prices chart to calculated risk. He never compares with wages...

Tony Bennett
Tony Bennett

A key question - what kind of haircut needed to move inventory?

In one market I follow, an agent (in March) told me 5% off of ask was average, with 10% in some cases. But sales slow. How long can sellers hold on ... before vicious (downward ) cycle commences?