Existing Home Sales Fall

Prices are soft and resales aren't coming into the market. Existing home sales fell a monthly 0.9 percent in August to a 5.33 million annualized rate, roughly the same rate where it was a year ago at 5.29 million for a thin 0.8 percent gain. And the single-family component isn't showing much life, down 2.3 percent in the month and up only 0.6 percent on the year. Saving the August report are condos which jumped 10.5 percent in the month to a 630,000 rate for a year-on-year gain of 1.6 percent.

Supply is very thin and is holding down sales. Supply on a monthly basis is at 4.6 months with 3.3 percent fewer existing homes for sale, at 2.04 million from July's 2.11 million. Prices aren't offering great incentives for possible sellers, with the median down 1.3 percent in the month to $240,200 for a year-on-year rate of 5.1 percent which, however, is still respectable in a low wage growth economy.

There hasn't been a lot of action this year in the resale market though the new home market is definitely showing life and, by itself, is likely to make housing a modest positive for the 2016 economy. In a final note, regional sales data are evenly balanced in today's report, ranging from no year-on-year change for the Northeast to only a 0.9 percent gain for the South.

Recent History Of This Indicator:
Existing home sales have not been showing the strength of new home sales while the pending home sales report, which tracks contract signings for existing homes, is pointing to continued softness. But price data in this report have been weakening which may be a plus for sales while supply of homes on the market, though still thin, has been improving which may be another plus.