U.S. existing home sales decline again in June

U.S. existing home sales dropped for the third straight month in June. Total sales fell 0.6 percent sequentially, at 5.38 million, in contrast to consensus expectations of a modest recovery to 5.48 million. May’s sales data were downwardly revised by 2000 and stood at 5.41 million.

Sales continued to be pulled down by lack of inventory of homes, according to Barclays in a research report. Also, high home prices and rising mortgage interest rates are expected to be lowering home affordability and likely also bearing down on home sales. The median price of an existing home rose 5.2 percent year-on-year to USD 276.9k, while the average price rose more modestly by 3.8 percent year-on-year.

The month’s supply of existing homes was 4.3, broadly where supply was this time last year. Properties typically stayed on the market for 26 days in June, unchanged since April, indicating towards a strong buyer interest.

“In our view, we are only likely to see significant improvement in sales if the supply of homes increases and buyers have more to choose from. An increase in supply will also likely slow the momentum of home price appreciation”, stated Barclays.

Below expected sales, along with downward revisions to the prior month’s data, plus below expected appreciation in the average price of an existing home all added to lower brokers’ commissions in the second quarter.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -55.2829. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex