U.S. home sales fell in July amid shortage

The median existing single-family home price was $246,000 in July – an increase of 5.4% compared with July 2015.

Sales of existing homes tumbled in July with buyers struggling to find affordable homes to buy, according to the National Association of Realtors (NAR). The consensus estimate by analysts was 5.51 million. The question remains whether that additional inventory will be in the starter-home market, which has been severely lacking since lower-end buyers fled to the rental side.

Transactions of single-family homes slipped 2% from last month to a seasonally adjusted annual rate of 4.82 million and is 0.8% below a year ago. “This year’s pace of existing home sales is still on track to be the best since 2006”, Reynolds says. “Lack of supply is stifling the efforts of many prospective buyers attempting to purchase while mortgage rates hover at historical lows”. July marked the 53rd consecutive month of year-over-year price gains. That may be in part due to a surge in refinancings since the U.K. Brexit referendum pushed mortgage rates lower, or it may have to do with the industry adjusting to higher home prices, Yun said. The average rate has historically been closer to 6 percent.

Existing-home sales in the West rose 2.5 percent to an annual rate of 1.23 million in July, but are still 0.8 percent below a year ago.

Inventories have fallen on an annual basis for the past 14 months, an indication that many homeowners are still recovering financially from the housing bust that triggered the Great Recession nearly a decade ago.

Inventory of homes for sale in the San Francisco metro area was up 36% in July compared with a year earlier, according to Redfin. Realtors® seems to indicate that appraisal complications are appearing more frequently as the reason why a contract signing experienced a delayed settlement, while NAR President Tom Salomone said in addition to affordability, another issue may be reemerging. At July’s sales pace, it would take 4.7 months to clear the stock of houses on the market, up from 4.5 months in June. Demand for loans to buy a home fell for the fifth time in the last six weeks to the lowest level in six months.

News Corp., owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors. The median price in the Northeast was $284,000, which is 3.3 percent above July 2015.

The Fed raised interest rates at the end of last year for the first time in almost a decade, but has held them steady this year amid concerns over persistently low inflation.

NAR also said the median existing-home price for all housing types was $244,100 in July, up 5.3 percent from $231,800 in the same month previous year.

The report said new home sales jumped 12.4 percent to an annual rate of 654,000 in July from the revised June rate of 582,000. The median price in the Midwest was $194,000, a year-over-year gain of 5.0%.