Existing Home Sales (Jul)

Existing home sales surprised on the upside in July, rising for the second consecutive month. But with demand easing and inventory at record lows, we doubt this is the start of a resurgence. Instead, we expect sales will resume their downward trend to around 5.6m annualised by end-2021.
Sam Hall Assistant Property Economist
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US Housing Market Update

Why are pending and existing home sales diverging?

An increase in the quality of mortgage borrowers, and record low inventory, are boosting the mortgage closing rate and leading to an increase in the share of pending home sales converted into existing home sales. Those factors are not set to go into reverse anytime soon, so we don’t think existing sales will snap back to match the pending sales index over the next few months.

29 November 2021

US Housing Market Data Response

New Home Sales (Oct.)

The marginal improvement in new home sales in October was flattered by a downward revision to September’s data, and the bigger picture is that sales have been fairly steady since May. Looking ahead housing demand will ease as mortgage rates rise but, with new home inventory set to remain much healthier compared to existing homes, new sales will see a steady rise to 880,000 annualised by end-2022.

24 November 2021

US Housing Market Data Response

Existing Home Sales (Oct.)

Existing home sales eked out a small gain in October, slowing considerably from last month’s increase. With inventory at a record low, buyer sentiment in a pit and mortgage rates on the rise, we expect sales will fall back to around 5.7m annualised by mid-2022, before rising slowly to 5.75m by end-2023.

22 November 2021

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US Commercial Property Valuation Monitor

Property valuations stabilise in Q2

Following a sharp deterioration in the previous quarter, property valuations held steady in Q2. But while changes so far in Q3 point to only a slight worsening in valuations, we expect Treasury yields will turn a corner and rise to 1.75% by end-2021, which will squeeze property valuations further. Movements in valuation scores were split between sectors this quarter, with a worsening in valuations leaving apartments and industrial looking fairly valued whereas a rise in our scores for office and retail made these sectors look relatively cheap. But the bigger picture remains the same, as we think that “average” office and retail assets will need to see further yield rises before they truly represent good value to investors.

23 August 2021

US Housing Market Data Response

Housing Starts (Jul.)

Single-family starts edged back in July, although they but remain elevated compared to pre-COVID levels. Shortages in lots, labour and materials are weighing on builder confidence and housing starts. But falling material prices should enable builders to work through their large backlog of delayed projects, which will help starts average 1.15m annualised this year.

18 August 2021

US Housing Market Data Response

Mortgage Applications (Jul.)

The recent decline in mortgage rates buoyed refinancing activity in July, but didn’t prevent another month of declining home purchase activity. While market conditions are tight, there are still plenty of households looking to buy, which is why we expect housing demand to stay close to its current level in H2 2021.

4 August 2021
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