August Existing Home Sales Slower than 2002, 2003

The August report regarding existing home sales from the Realtors was interesting. The Realtors Report focused on sales prices and inventory and the seasonally adjusted number of units sold. The problem with using the seasonally adjusted data is that we do not have access to the adjustments. It is easier to examine the average sales price for August over time as well as the units sold.

Units Sold and Average Soles Price Higher than past nine years. This should be good news. The Housing Recession hurt people who were trying to sell homes as property values fell below their original purchase prices. People were upside down, owing more than the homes were worth. Contrary to the reported value. The number of units sold were up 7.34% over last August and the average sales price was up 3.98% over last August. The bad news is that the units sold this August were fewer than what were recorded  August 2002 through August 2006.

The Rolling Year Numbers are Slower than August 2003and August 2008. The 12 month rolling total number of existing units sold is slower than the months between August 2003 and August 2008. Sales are not accelerating  at the pace prior to the housing recession. Things have been improving, the problem is that this is looking backward at the data from the past twelve months.

The Current Year Sales are Trending Lower through August than what was seen during 2013 and 2015.  This is not what the Realtors are reporting.They are saying that homes are selling at a slightly faster than last year. The third graph illustrates that we are trending for a pace between 4.935 million units and 5.087 million units. This could be considered a forward looking trend. If that is true and the forward looking number is slower than the rear looking data this means that we are seeing a slowing in the existing home sales market.

The revisions to the prior data  were downward. The existing units sold during May were revised down from 526,000 units to 525,000 units and July was revised from 514,000 to 513,000. The average sales price for May was revised down from $281,700 to 280,900  and the average sales price for July was revised $285,900 to 284,900. The total inventory was revised down for May from 2.15 million to 2.14 million units. July was revised down from 2.13 million to 2.11 million units. The median sales prices were revised down for May, June and July.

The Answer is not Inventory - It is Jobs. The Realtors blamed some of the slowness in sales on a lack of inventory. The only time that we have had a lower level of units during the month of August, since 1999, was during 2000. We saw fewer units sold during 2007-2015 with higher inventory. It is not the months of supply either. We had a slightly lower MOS during August 2003 and August 2004.We have some of the lowest workforce participation that we have seen since 1980 and some of the lowest home ownership rates since the 1990s. We have elevated levels of people working two part-time jobs. None of this is good for the housing market.