House Sales Slow Down, Inventory Grows in July
The latest data on new residential sales in the United States jointly reported by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development reveals that economic activity in the U.S. housing market may be slowing down. According to the seasonally-adjusted July 2017 data, sales of new residential houses in the United States dropped that month, when compared to June 2017 and July 2016 figures.
The sales figures for new single-family houses in July 2017 were about 571,000 units, which is down about 9.4% compared to the revised June figure, and down about 8.9% compared to the July 2016 estimate.
The inventory of new homes for sale has subsequently jumped, due to declining sales. According to the July 2017 figures, homes are spending about 5.8 months on the market before getting sold, in comparison to the 5.2 months reported in May and June. About 276,000 new houses were up for sale by end of July.
Compared to June, a dearth of new homebuyers was seen in three of the four U.S. regions in July. A significant drop in sales was seen in the Northeast region, where purchases of new privately-owned houses fell by 23.8%.
Likewise, the western states also witnessed a drop in sales of new residential properties by 21.3%. The largest region, which comprises of the Southern states, posted a decline of 4.1% in sales.
The only region that saw an increase was the Midwestern region, where sales increased by 6.2% between June and July 2017. However, when compared to July 2016, the region reported a year-over-year drop of 12.7% in sales of new residences.
Likewise, the Northeast and South regions reported year-over-year dips in sales activity by 13.5% and 11.7%, respectively.
The findings of this report reconcile with the recently-posted report on new residential construction from the U.S. Census Bureau, which indicated that construction of new homes for both single- and multi-family housing dropped in July.
The trend points to a slowdown in the U.S. housing market, which should raise red flags for government policymakers who seem to believe that the American economy is in good health.
“Monthly New Residential Sales, July 2017,” United States Census Bureau, August 23, 2017.