Early Read on Existing Home Sales in June

From housing economist Tom Lawler:

Based on publicly available local realtor/MLS reports released across the country through today, I project that existing home sales as estimated by the National Association of Realtors ran at a seasonally adjusted annual rate of 5.12 million in June, down 5.4% from May’s preliminary pace and down 14.2% from last June’s seasonally adjusted pace.  

Local realtor reports, as well as reports from national inventory trackers, suggest that the inventory of existing homes for sale last month was up significantly from a year earlier.  However, the NAR’s estimate may not show the same increase as these reports suggest, as most of these reports exclude listings with pending contracts.  E.g., the Realtor.com report for June showed that listings excluding those with pending contracts were up 18.7% from last June, while listings including pending contracts were down 1.4% YOY.  (Pending listings in the Realtor.com report were down 16.4% from last June.)  The NAR’s inventory estimate has tracked the Realtor.com total inventory measure more closely that the “ex-pendings” inventory measure.  (Note also that the Realtor.com inventory number reflects average listings during the month, while the NAR inventory number is an end-of-month estimate.)  Just as the NAR inventory numbers understated the decline in “effective” homes for sale during most of last year, it is now understating the increase in effective inventory.

Finally, local realtor/MLS reports suggest the median existing single-family home sales price last month was up by about 12.7% from last June, a marked YOY deceleration from the past several months.

CR Notes:

With a new holiday this year in June, Juneteenth, it is possible the seasonal adjustment will be off a little. However, the local markets I track suggest a significant year-over-year decline in NSA sales for June.

The National Association of Realtors® (NAR) is schedule to release June existing home sales on Wednesday, July 20th at 10:00 AM ET. The consensus is for 5.40 million SAAR, down from 5.41 million last month. Based on Tom Lawler’s estimate, we should expect a large negative surprise.