U.S. existing home sales likely to have dropped in July

U.S. existing home sales were restrained in June due to persistently lean inventories. Existing home sales dropped 1.8 percent to a 5.52 million-unit pace in the month. The housing market seems to be sadly out of balance, noted Wells Fargo in a research report.

Potential homebuyers face a shortage of available inventory, especially at lower price points. Developers are positive about demand for new stock; however, available lots are lacking amidst increasingly prohibitive construction costs that are worsened by a lack of construction labor.

These pressures inhibit new home sales, while existing homeowners are understandably reluctant to put their homes on the market and risk not finding trade-up homes in their price range. Home prices continue to reach record highs.

July might have been more conducive for homebuyers as pending sales rose in June, which tend to lead existing sales by 1-2 months. According to Wells Fargo, existing home sales are expected to have reached 5.49 million in July.

At 19:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was bearish at -81.176. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest