A Summer Buyers Market : Home Supplies Are Rising

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Home Supplies Rise To 7-Month High

Home resales slipped for the 3rd straight month, according to National Association of REALTORS® data.

Existing Home Sales dropped 1 percent from May as the number of homes sold nationwide fell to a seasonally-adjusted, annualized 4.77 million units. It’s the monthly report’s lowest reading since November 2010. The report also showed supplies of homes rising to 9.5 months — also the highest reading since November.

“Home Supply” is the amount of time it would take to exhaust the complete home inventory at the current pace of sales.

June’s Existing Home Sales data would have been stronger if not for a high contract cancellation rate. As compared to May’s 4 percent rate, June’s cancellation rate was 16 percent; an elevated figure that “stands out in contrast” to what’s typical, according to the REALTOR® trade group.

Different Regions, Different Results

The Existing Home Sales data varied on a region-to-region basis, highlighting an important housing market concept. Namely, that all real estate is local.

Regional data showed strength in the Midwest and weakness in New England.

• Northeast : -5.2% from May
• South :+0.5% from May
• Midwest : +1.0% from May
• West : -1.7% from May

And, although NAR doesn’t report it, we can be sure home resales varied a state-wide level, too. What’s true for Washington DC housing is not necessarily what’s true for Ohio, for example. Each of the 50 states has its own trends, and within those 50 states, there are thousands of cities and neighborhoods, each which follows their own respective trends.

The “national housing market” doesn’t exist.

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Overall, the June Existing Home Sales report represents opportunity for home buyers. Sales are stagnant, supplies are rising and there’s no shortage of properties from which to choose. Furthermore, mortgage rates are low.

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(Post adapted from Bring the Blog)