Sales of existing homes dropped unexpectedly in June to the lowest level seen all year, as first-time buyers fell to their lowest share of sales seen this year. Sales were down 5.4% from May to a seasonally adjusted annual rate of 4.37 million, according to data released today by the National Association of Realtors (NAR). On an annual basis, sales were up 4.5%.
"This was a weak report and quite unexpected," wrote Patrick Newport, U.S. economist at IHS Global Insight, in a statement discussing the numbers today, pointing out that pending home sales numbers and the Mortgage Bankers Association’s Purchase Index had both indicated sales would be picking up. "Indeed, if one removes investors from the calculations, the drop in sales was even sharper than the reported ones."
The NAR pointed blame at tight lending conditions and low inventory, in a report that steered its focus instead on the month’s good news: Both average and median prices were up, gaining 5.7% and 7.9%, respectively.
However, Gary Painter, an associate professor at the USC Lusk Center for Real Estate, remained confident that the poor performance was simply a glitch. "Slowly we’re moving in the right direction," he said on a call with Builder today. "We’ll slowly see more homes coming on the market. In some parts of the country we’re already seeing that, but when you look overall, it’s always a mixed picture."
Newport also remained hopeful. "The housing market is back on track," he wrote. "This does not mean that home sales and housing starts will be up every month. There will be bumps on the road. The market for existing homes hit one such bump in June."
See the National Association of Realtors’ full report on existing-home sales in June.
Claire Easley is a senior editor at Builder.