– August 21, 2020

Sales of existing homes jumped 24.7 percent in July to a 5.86 million seasonally adjusted annual rate. Sales are now up 8.7 percent from a year ago and solidly in the 5 to 6 million range they had been in since 2015.

Sales were up in all four regions in July (see first chart): sales were up 30.5 percent in the West and are up 7.8 percent from the year-ago level; sales rose 19.4 percent in the South, the largest region by volume, leaving that region’s sales rate 12.6 percent above the year-ago pace; sales gained 27.5 percent for the month in the Midwest and are 10.3 percent above the July 2019 rate; and sales were up 30.6 in the Northeast, but were still 5.9 percent below year-ago levels.

Sales in the market for existing single-family homes, which account for around 90 percent of total existing-home sales, rose 23.9 percent in July, coming in at a 5.28 million seasonally adjusted annual rate. From a year ago, sales are up 9.8 percent. The July pace is the fastest since December 2006 (see top of second chart).

By region, sales for existing single-family homes followed the same pattern as total existing homes: sales were up 29.4 percent in the West and are up 8.9 percent from the year-ago level; sales rose 18.6 percent in the South, leaving that region’s sales rate 13.3 percent above the year-ago pace; sales gained 26.9 percent for the month in the Midwest and are 10.9 percent above the July 2019 rate; and sales were up 30.2 percent in the Northeast, leaving sales 3.4 percent below year-ago levels.

Condo and co-op sales posted a 31.8 percent surge for the month, but still leaving sales equal to the July 2019 pace. Sales came in at a 580,000 pace for the month versus 440,000 in June.

Total inventory of existing homes for sale fell 2.6 percent to 1.50 million in July, pushing the months’ supply (inventory times 12 divided by the annual selling rate) to 3.1 from 3.9 in June. For the single-family segment, the months’ supply also fell, to 3.0, tying the record low (see bottom of second chart), from 3.8 in June, while the condo and co-op months’ supply fell to 4.1 from 5.3. 

Though unemployment remains high and the outlook for the labor market and the broader economy remains highly uncertain, near record-low mortgage rates and surging demand for less dense living areas are supporting a strong recovery for the housing market.  Only time will tell if these conditions will continue, but for now the housing market remains one of the brightest areas of the economy.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.

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