A report released by the National Association of Realtors on Monday showed existing home sales in the U.S. unexpectedly decreased for the third straight month in June.
NAR said existing home sales fell by 0.6 percent to an annual rate of 5.36 million in June from a downwardly revised rate of 5.41 million in May. Economists had expected existing home sales to climb by 0.5 percent.
“There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining,” said NAR chief economist Lawrence Yun.
He added, “The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market.”
The unexpected drop in existing home sales came as declines in the South and West exceeded sales gains in the Northeast and Midwest.
NAR said the median existing home price for all housing types in June was $276,900, surpassing May as the new all-time high and up 5.2 percent from June of last year.
Total housing inventory at the end of June climbed 4.3 percent to 1.95 million existing homes available for sale, representing 4.3 months of supply at the current sales pace.
“It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels,” said Yun.
He added, “Furthermore, it remains to be seen if this modest increase will stick, given the fact that the robust economy is bringing more interested buyers into the market, and new home construction is failing to keep up.”
On Wednesday, the Commerce Department is scheduled to release a separate report on new home sales in the month of June. New home sales are expected to slump by 2.8 percent.
The material has been provided by InstaForex Company – www.instaforex.com