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Today data showed that sales of existing homes were unchanged in August. According to analysts at Wells Fargo, home sales continue to come in below expectations.  

Key Quotes:  

“Housing continues to lag behind the general pickup in economic activity. While employment and income growth have strengthened over the past year, sales of both new and existing homes have lagged, and homebuilding continues to have a hard time gaining traction. Existing home sales have been particularly disappointing, as many homeowners remain reluctant to put their homes up for sale due to fears that they will have a hard time finding a suitable home to buy. The lack of turnover in the housing market at a time when the economy is growing strongly is without precedent and has contributed to the sustained run-up in home prices, as homes in desirable locations are tending to draw multiple bids and sell very quickly.”

“There is a debate as to whether the sluggish pace of home sales is principally due to supply or demand influences. The answer is both. The supply of affordable homes remains exceptionally lean but demand is clearly there. Homes prices around the median, which is $264,800 nationwide, are selling very quickly.”

“According to the National Association of Realtors (NAR), homes typically stayed on the market for 29 days in August, up from 27 days in July but down from 30 days last August. Fifty-two percent of homes sold in August were on the market for less than a month.”