July Sees a Decline in Home Sales

Laura Kusisto reported today at The Wall Street Journal Online that, “Sales of previously owned homes fell in July to their weakest level this year, as a shortage of homes for sale weighs more heavily on the market.

“Existing home sales fell 1.3% to a seasonally adjusted annual rate of 5.44 million, the National Association of Realtors said Thursday. The sales pace is still up 2.1% from July of last year.

“‘Nearly all realtors across the country are reporting that the inventory shortage is limiting sales potential,’ said Lawrence Yun, chief economist at the National Association of Realtors.”

Ms. Kusisto indicated that, “At the current sales pace there was 4.2 months of supply of homes on the market, down from 4.8 months a year ago. There were 9% fewer homes on the market in July than there were a year earlier.

“‘One year ago, I thought it was a very tight condition, but the housing shortage has intensified,’ Mr. Yun said.

Inventory has been steadily declining for most of the last three years.”

The Journal article explained that, “A lack of inventory limits demand both because buyers get frustrated and give up if they can’t find a home they like and because it pushes up prices beyond what many families buying their first home can afford.”

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