July Existing Home Sales-Weaker than July 2013

Yesterday we received the new home sales data. The common thought was that there was a huge increase over last year's sales volume and that the report was incredibly strong. The problem is that the number of units sold was worse than what we saw during 1992.

Another problem is that the projection of  654,000 units could be sold this year does not take into account the downward revisions to the April, May, and June data. If we examine the data from the past twelve months the new home sales could  be on track for between 535,000 and 583,000 units. If we just look at the first six months of the year, we could be on track  for between 485,000 and 535,000. This is better than last month's projection of under 500,000 new single family units sold.

Existing Homes have seen  some ups and downs. We have seen rising home values and rising units over the past few months and years. We  the same month numbers improve for the third year in a row during April and May of this year.

Last month the existing home sales data revealed that we are still in a recovery mode. The June Existing Home Report showed the highest level of units sold and the highest average sales price since 2007. The problem here is that the number of June units sold was still slower Than June 2003, 2004, 2005, and 2006. This column projected that we are trending with the data from 2014 which was slower than 2015. It appeared that we are probably heading towards a sales rate of approximately 5.1 million homes sold by the end of the year. This is a far cry from the pace of 7 million units sold during the peak of the housing market. It is also significantly lower than the 5.57 million homes projector from the Realtors Association.

Weakening Existing Home Sales Data. Today we saw the release of the existing home sales data.The number of unadjusted existing home sold during July dropped from last year's 551,000 units to 514,000. This level is lower tan the 518,000 recorded during 2013. This is coupled with downward revisions to the number of June sales, the June average Sales Price, and the reduction in June inventory. The number of units sold during June were revised down from 583,000 to 582,000. The Average Sales price was revised down from $293,100 to 289,800. The inventory was revised down from 2.12 million homes to 2.11 million homes.

The Rolling Year Sales Pace dropped to 5.337 Million Homes. This is a bit of improvement from last July's 5.170 million level. The problem is that this value is lower than the rate of 5.374 million units during June and lower than the rate of 5.364 million units during May. Home sales tend to peak during the final week of June and the first week of July. We should see this rolling year total stabilize if the housing market is still in a recovery mode.

The Current Year Data is Lagging Behind 2015 and 2013. We have sold 2.9 million units year to date. If we trend with the data from 2016 we will see 5.087 million units sold. If we track with 2000 we will see 5.173 million units sold. This tells me that we are heading to a rate of 5.1 Million or less.

The data is better than we have seen during some of this recovery. This is the second month since April that we have seen year over year same month declines in units sold. The month to month drop in units sold was the largest since July 2011. The year to year drop from July 2015-2016 was larger than July 2013-2014. The month to month and year to year data is not good.

The Economy is slowing.