Ahead of the Bell: US home sales
WASHINGTON (AP) — The National Association of Realtors reports on August sales of existing homes Thursday at 10 a.m. Eastern.
SALES REBOUND: Economists expect that sales rose 1.1 percent to a seasonally adjusted annual rate of 5.51 million, according to a survey by the data firm FactSet. The gain would mark a recovery from sales slipping in July after several months of growth.
EAGER BUYERS: Housing has been a bright spot amid weak economic growth this year. Sales have surged even as prices are rising. Historically low mortgage rates have combined with an improved job market to boost demand. Economists say the sales gains would likely be even higher if the number of listings had held steady instead of declining.
But the number of properties for sale is dwindling.
Inventory has tumbled 5.8 percent from a year ago to 2.13 million homes. The decrease has meant that demand is greater than supply, prompting prices to rise, bidding wars to erupt, and many would-be buyers stuck in rentals. Would-be homebuyers are struggling to find attractive properties in their price range and may be delaying their purchases.
The median home sales price was $244,100 in July, a 5.3 percent increase from a year ago. Home price growth has been roughly double average hourly wage gains, making it harder for many Americans to save for a down payment as the ownership rate has dipped to a half-century low.
Construction of single-family houses has increased this year, but it’s done little to alleviate the supply constraints. At the current sales pace, it would take 4.3 months to exhaust the supply of 233,000 new homes on the market. The months’ supply has fallen from 5.2 months a year ago, according to government reports.
Buyers are getting some help from mortgage rates that have stayed near historic lows.
Mortgage buyer Freddie Mac said the average 30-year fixed-rate mortgage was 3.50 percent last week, down from a 52-week high of 4.01 percent. The average rate has historically been closer to six percent.