The Week Ahead: Can New and Existing-Home Sales Keep it Up?

Riding the highest share of first-time homebuyers in four years (33 percent), existing-home sales shot up in June to an annual rate of 5.57 million, the highest annual rate for any one month in more than nine years (5.79 million in February 2009).

Will existing-home sales be able to sustain the momentum and rise to new highs in July? The industry will find out on Wednesday, August 24, when the National Association of Realtors publishes its July 2016 existing-home sales report.

A lingering inventory shortage suggests that existing-home sales will continue to flourish—what IS available is not going to last long on the market.

“Though June’s existing home sales numbers show that we’re about 95 percent back to the pre-recession average, there are many more households in the U.S. looking for homes than in the early 2000s,” Trulia Chief Economist Ralph McLaughlin said. “As such, a lack of supply continues to hold back homebuyers. The month’s supply of existing homes in June 2016 was the lowest since June 2005. Homebuyers are finding little relief as the housing market recovery marches on. 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.”

In spite of the ongoing supply issues, NAR Chief Economist Lawrence Yun said the first half of 2016 was solid for homebuying.

“Existing sales rose again last month as more traditional buyers and fewer investors were able to close on a home despite many competitive areas with unrelenting supply and demand imbalances,” Yun said. “Sustained job growth as well as this year's descent in mortgage rates is undoubtedly driving the appetite for home purchases.”

New Home Sales—HUD/Census Bureau, Tuesday, August 23, 10 a.m. EST

The HUD/Census Bureau report on new home sales for July will be released on Tuesday, August 23. Like existing-home sales, new home sales hit their highest point in June since the last decade.

New home sales were up to a seasonally adjusted annual rate of 592,000 in June, which was 3.5 percent higher than in May and 25.4 percent higher than June 2015’s rate—the highest rate since February 2008.

“This is a continued sign that demand for homes remains solid and aptly reflects increasing homebuilder confidence,” McLaughlin said. “The share of all home sales composed of new homes ticked upward to 10.6 percent in June, as new home sales continue to slowly ease the crunch of low existing inventory.”

This Week's Schedule

Tuesday, August 23
New Home Sales for July 2016, HUD/Census Bureau, 10 a.m. EST

Wednesday, August 24
House Prince Index (HPI) for June 2016, Federal Housing Finance Agency, 9 a.m. EST
Existing-Home Sales for July 2016, National Association of Realtors, 10 a.m. EST

Friday, August 26
GDP, 2nd Estimate for Q2, Bureau of Economic Analysis, 8:30 a.m EST
Consumer Sentiment for August 2016, University of Michigan Consumer Survey Center, 10 a.m. EST