According to RE/MAX’s latest National Housing Report, national inventory of homes for sale fell -1.4% y/y in July 2019 and -0.2% from June 2019. This decline in inventory represents, according to this report, the smallest month decrease sine July 2013.
July 2019 posted a 2.7-month supply of inventory, down from a 3.3-month supply in 2018. Days on the market averaged out to 43, two days longer than during the same time period last year. Additionally, according to this National Housing Report from RE/MAX, the median sales price was $273,000, a +9.2% increase in price from July 2018. (The all-time record high median home price is $276,000.)
RE/MAX’s CEO Adam Contos said that this inventory decline appears to have been stimulated by the increase of +2.4% in home sales due to low interest rates. Contos said, “The housing market has been a bit uneven since the early spring with each encouraging month seemingly followed by one with lukewarm results. It’s possible the housing market has finally shaken some mud off its boots and can maintain its momentum for the back half of the year. If the broader macro-environment hangs on, we could see a potentially strong finish to 2019.”
Contos’s statement concerning home prices…”Home prices have risen, year over year, in 88 or the last 90 months back from February 2012. Although lower interest rates help affordability, we have now seen two straight months of accelerating price increases. If the trend continues, it is not an encouraging development for buyers.”
Meanwhile, the supply of new homes fell -1% in July 2019 which represents the biggest annual decline in new home inventory since Q1 2013, according to latest research by Redfin. Redfin also reported that new home sale prices fell just -0.5% from July 2018.
CNBC’s Diana Ollick adds to this post by reporting that building starts dropped -4% to an annual rate of 1.191M units in July 2019, according to the Department of Commerce. Most of this dropped can be credited to a drop in start rates of -16.2%, 315,000 units, in the multi-family market segment.
With single-family building starts rising in the Northeast, West and Midwest, housing starts increased +1.3% to 876,000 units overall in July 2019, the highest level in six months. The South, however, saw single-family starts decline by -3.9%.
Building permits in both single-family and multifamily market segments surged +8.4% and +21.8% respectively. The number of single-family permits saw the largest gain since June 2017 and reached a seven-month high.
Residential investment contracted again for the sixth straight quarter in July 2019, the longest negative stretch since the 2007-2009 Great Recession.