U.S. existing home sales fall again in July

U.S. existing home sales dropped in the month of July. On a sequential basis, existing home sales fell 0.7 percent to 5.34 million, the fourth consecutive monthly fall. Activity is at the slowest rate since February 2016. The July outturn disappointed expectations for a mild rise of 0.4 percent.

The fall was mainly seen in the condo and co-op segment, where sales dropped 4.8 percent to 590k. In the meantime, sales of single-family homes fell just 0.2 percent to 4.75 million.

Region wise, the West was the only region that saw a rise in activity in July, rising 4.4 percent. Sales fell in Northeast after two strong months, while the Midwest and South saw milder declines. The number of homes available for sale fell 0.5 percent to 1.92 million in July. That level is the same as was a year ago, and is still quite low relative to historical levels. Homes typically stayed on the market for 27 days.

Median price growth accelerated to 4.5 percent from 4 percent, but still slightly below the near 6 percent pace seen at the start of the year. First time buyers accounted for 32 percent of sales in July, slightly up from last month but down from 33 percent from a year ago.

The existing home market continues to suffer from a lack of supply, and there was little help from listings in July, noted TD Economics. Low inventory levels and sound demand fundamentals have been a recipe for rising prices and reduced affordability. The latter has been falling on a trend basis since early 2017. Not enough new homes being built adds to the supply challenge.

“New home construction faces rising material and land costs and labor shortages, constraining activity. These barriers are unlikely to dissipate quickly, constraining the housing sector's performance over the medium term”, added TD Economics.

At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -55.3641. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex