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Lawler: Early Read on Existing Home Sales in July


From housing economist Tom Lawler:

Based on publicly-available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 4.90 million in July, down 4.3% from June’s preliminary pace and down 18.7% from last July’s seasonally adjusted pace. Unadjusted sales should show a larger YOY % decline, reflecting the lower business day count this July compared to last July. While virtually all markets saw a significant YOY decline in sales last month, the West region saw an especially large drop — about 33% (NSA) by my estimate.

Local realtor reports, as well as reports from national inventory trackers, suggest that the inventory of existing homes for sale last month was up substantially from a year earlier. However, the NAR’s estimate may not show the same increase as these reports suggest, as most of these reports exclude listings with pending contracts. E.g., the report for July showed that listings excluding those with pending contracts were up 30.7% from last July, while listings including pending contracts were up just 3.5% YOY. (Pending listings in the report were down 19.4% from last July.) The NAR’s inventory estimate has tracked the total inventory measure more closely that the “ex-pendings” inventory measure. (Note also that the inventory number reflects average listings during the month, while the NAR inventory number is an end-of-month estimate.) Just as the NAR inventory number understated the decline in “effective” homes for sale during most of last year, it is now significantly understating the increase in effective inventory.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 10.6% from last July, a marked YOY deceleration from earlier this year.

CR Note: The National Association of Realtors (NAR) is scheduled to release July existing home sales on Thursday, August 18, 2022, at 10:00 AM ET. The consensus is for 4.88 million SAAR.

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