U.S. existing-home sales tumble to 2½-year low

Prospective home buyers speak with a loan advisor and real estate agent while touring a house for sale. The National Association of Realtors said on Wednesday that existing-home sales fell in July.

The numbers: Existing-home sales ran at a 5.34 million seasonally-adjusted annual rate in July, down 0.7% versus June, the Wednesday. That was the lowest pace since February 2016, and missed the MarketWatch consensus forecast of 5.40 million.

What happened: Sales of previously-owned homes slid for the fourth consecutive month as supply remained too scarce and prices too high to tempt would-be buyers. July’s selling pace was 1.5% lower than a year ago, and at the current sales rate, it would take 4.3 months to exhaust available supply, the same as in June, and well below long-time historical averages.

After a brief uptick in June, inventory was unchanged compared to a year ago in July and down 0.5% for the month.

Homes for sale were on the market for an average of 27 days in July, up a bit from 26 days in June. The median sales price in June was $269,600, up 4.5% compared to July 2017.

Big picture: For years, the Realtors have been warning that many would-be buyers, particularly at the lower end of the market, are being priced out. Now they’re also acknowledging that many others are just deciding to sit it out until market conditions change.

First-timers made up 32% of all buyers in July, a tick higher than in June but still well below long-time averages, and making no real progress. Notably, distressed sales made up the lowest share of all transactions, at 3%, since the group began tracking that metric in 2008.

The group now forecasts 2018 sales will be 1% lower than the 5.51 million homes sold in 2017.

Regional sales breakdowns ranged from an 8.3% decline in the Northeast to a 4.4% gain in the West. In the Midwest, sales were down 1.6%, and in the South they ticked down 0.4%.

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What they’re saying: “There are no tears left to cry with yet another disappointing housing report,” said BMO Capital Market‘s Jennifer Lee, invoking teen idol .

“If I had to pick out something positive to say, this will be it….single-family homes slipped just 0.2%, while condos weighed with a 4.8% drop,” Lee added.

“Three years of exceptionally tight inventory and exceptionally strong price gains are catching up with the market, and are visible both in softer demand from stretched buyers and a still pervasive — if somewhat easier — inventory crisis,” said Zillow Senior Economist Aaron Terrazas.

Market reaction: The Dow Jones Industrial Average   was down marginally in early-morning trading.

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