Steel Markets
Tight Inventory Slows July Sales of Existing Homes
Written by Sandy Williams
August 24, 2016
Existing home sales lost momentum in July, falling for the first time since November 2015. The National Association of Realtors reports that sales were down 3.2 percent from June to a seasonally adjusted annual rate of 5.39 million. On a year over year basis sales fell 1.6 percent marking only the second time in the last 21 months that sales were below their year ago level.
Lawrence Yun, NAR chief economist, says existing sales fell off track in July after steadily climbing the last four months due to lack of affordable homes available to buyers. “Severely restrained inventory and the tightening grip it’s putting on affordability is the primary culprit for the considerable sales slump throughout much of the country last month,” he said. “Realtors are reporting diminished buyer traffic because of the scarce number of affordable homes on the market, and the lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows.”
Buyers of single family homes were not the only ones frustrated by availability. Condo buyers faced tight inventory as well, along with a slowdown in new construction.
Median existing home price rose 5.3 percent year over year to $244,100. Inventory supply was 0.9 percent higher at 2.13 million existing homes for sale but was 5.8 percent lower than the 2.26 million available a year ago. Supply at the current sales rate would last 4.7 months, up from 4.5 months in June.
Sales fell in all regions of the U.S. except the West which posted a 2.5 percent rise in purchases. Sales in the Northeast, Midwest and South dropped 13.2 percent, 5.2 percent and 1.8 percent, respectively.
“Although home sales are still expected to finish the year at their strongest pace since the downturn, thanks to a very strong spring, the housing market is undershooting its full potential because of inadequate existing inventory combined with new home construction failing to catch up with underlying demand,” adds Yun. “As a result, sales in all regions are now flat or below a year ago and price growth isn’t slowing to a healthier and sustainable pace.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets
Glenfarne Alaska LNG and POSCO ink preliminary partnership
Glenfarne Alaska LNG and POSCO signed a preliminary strategic agreement during the GasTech Conference in Milan on Thursday.
Steel export volumes remain weak through July
Following a 3% decline in June, the amount of steel shipped outside of the US edged up 1% in July to 623,000 short tons. July was the sixth-lowest monthly export rate since the COVID-19 pandemic, and...
Hot-rolled market participants say ‘doldrums’ to roll on through year-end
Participants in the hot-rolled steel sheet market expect the market to remain subdued through the end of the year.
Market says cutting interest rates will spur stalled domestic plate demand
Market sources say demand for domestic plate refuses to budge despite stagnating prices.
Great Lakes iron ore shipments declined in August
Shipments of iron ore across the Great Lakes dropped to 5 million short tons (st) in August, according to the latest data from the Lake Carriers’ Association. That’s down 9.1% compared to August 2024 and 2% lower than the month’s 5-year average. All told, the year-to-date (YTD) iron ore volumes through August totaled 26.7 million […]