U.S. existing home sales fall sequentially in July

U.S. existing home sales dropped in July on sequential terms and came in lower than consensus expectations. Existing home sales fell 1.3 percent month-on-month to 5.44 million, as compared with consensus expectations of a drop of 0.9 percent to 5.55 million. The earlier month’s print was slightly revised down by 1000 to 5.51 million. The drop in sales was mainly due to sales of multi-family units, which dropped 4.8 percent on the month.

Sales of existing single-family homes dropped by a moderate 0.8 percent on the month, recording the second straight monthly fall. Looking at region wise, the Northeast registered the biggest drop in sales after the Midwest. Meanwhile, sales in the South and the West rose sequentially.

Existing home sales inventory continues to stay at historically low levels and dropped to 1.79 million units on a seasonally adjusted basis. Months’ supply of homes remained stable at 4.2 million units. The scarcity of inventory is one of the factors that is expected to put downward pressure on sales in the near future, noted Barclays in a research report.

Delving into other details of the report, the share of distressed transactions continued to be steady at 5 percent, which is a rebound from the 7 percent level seen at the start of the year. Around one third of all buyers of existing homes were first-time buyers, and less than one quarter of all purchases were conducted in cash. Self-identified investors account for around 13 percent of all transactions. The weaker-than-expected data suggest lower broker commissions than expected, stated Barclays.

“This led us to revise our tracking estimate for residential investment in the quarter and, as a result, our Q3 GDP tracker declined by one-tenth to 2.5% q/q (saar) after rounding”, added Barclays.

At 15:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was neutral at 17.068. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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