Home Sales Fell
By 1.3% in June;
Inventories Rose
By MICHAEL CORKERY and DONGJIN PARK
July 26, 2006
Home sales declined last month while inventories swelled to the highest levels since 1997, the latest sign that the housing market continues to cool. Consumer confidence, meanwhile, stabilized.
The National Association of Realtors said sales of existing, or previously owned, homes fell 1.3% to a seasonally adjusted annual rate of 6.62 million units in June from a revised 6.71 million in May. When compared with June 2005, sales were down 8.9%.
Realtors' Chief Economist David Lereah says that for now, the housing market appears headed for a soft landing in most markets, meaning that the market will cool in an orderly fashion. But if the Federal Reserve continues to raise interest rates while consumers get hit with higher oil prices, "some local economies could turn sluggish and contract," which could result in a harder landing for housing, Mr. Lereah said.
Home prices, meanwhile, were little changed overall but varied considerably by region. The national median existing home price was $231,000 in June, up 0.9% from June 2005. That was the slowest monthly year-over-year price increase since May 1995.
In the Northeast, where sales declined 3.5% in the month, the median price was $298,000, up 7.2% from a year ago. In the South, where sales were down 2.3% in the month, the median price was down 0.5% from June 2005 to $191,000. In the Midwest, last month's sales were unchanged from May, while the median home price was down 1.7% to $175,000 from a year ago. Last month's sales in the West were unchanged from May and the median price was $342,000, the same as a year ago.
"It's clear that we've seen a very significant slowdown [in price appreciation] and may be approaching an episode of overall declines," says Richard DeKaser, chief economist at National City Corp. in Cleveland. He added that "I would call this, thus far, a very orderly correction."
Meanwhile, inventories rose 3.8% to 3.73 million existing homes for sale in June, which is a 6.8-month supply of homes at the current sales pace. That was the highest inventory level since July 1997 and compares with a 4.4-month supply in June 2005.
Consumer confidence unexpectedly edged up in July as consumers shrugged off rising gas prices and higher interest rates. The Conference Board, an independent business-research group in New York, said its index of consumer confidence rose to 106.5 in July from June's revised 105.4.
By 1.3% in June;
Inventories Rose
By MICHAEL CORKERY and DONGJIN PARK
July 26, 2006
Home sales declined last month while inventories swelled to the highest levels since 1997, the latest sign that the housing market continues to cool. Consumer confidence, meanwhile, stabilized.
The National Association of Realtors said sales of existing, or previously owned, homes fell 1.3% to a seasonally adjusted annual rate of 6.62 million units in June from a revised 6.71 million in May. When compared with June 2005, sales were down 8.9%.
Realtors' Chief Economist David Lereah says that for now, the housing market appears headed for a soft landing in most markets, meaning that the market will cool in an orderly fashion. But if the Federal Reserve continues to raise interest rates while consumers get hit with higher oil prices, "some local economies could turn sluggish and contract," which could result in a harder landing for housing, Mr. Lereah said.
Home prices, meanwhile, were little changed overall but varied considerably by region. The national median existing home price was $231,000 in June, up 0.9% from June 2005. That was the slowest monthly year-over-year price increase since May 1995.
In the Northeast, where sales declined 3.5% in the month, the median price was $298,000, up 7.2% from a year ago. In the South, where sales were down 2.3% in the month, the median price was down 0.5% from June 2005 to $191,000. In the Midwest, last month's sales were unchanged from May, while the median home price was down 1.7% to $175,000 from a year ago. Last month's sales in the West were unchanged from May and the median price was $342,000, the same as a year ago.
"It's clear that we've seen a very significant slowdown [in price appreciation] and may be approaching an episode of overall declines," says Richard DeKaser, chief economist at National City Corp. in Cleveland. He added that "I would call this, thus far, a very orderly correction."
Meanwhile, inventories rose 3.8% to 3.73 million existing homes for sale in June, which is a 6.8-month supply of homes at the current sales pace. That was the highest inventory level since July 1997 and compares with a 4.4-month supply in June 2005.
Consumer confidence unexpectedly edged up in July as consumers shrugged off rising gas prices and higher interest rates. The Conference Board, an independent business-research group in New York, said its index of consumer confidence rose to 106.5 in July from June's revised 105.4.
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