Existing Home Sales Slump As Housing Affordability Is Now Becoming A Crisis

from Zero Hedge

Following a disappointing April for home sales data, and weakness in May’s building permits data, our fiorst glance at May sales suggests all is not well. Existing home sales slipped 0.4% MoM (and were revised lower in April), well below expectations o a 1.1% rebound.

This dropped the Existing Home Sales SAAR to 5.43mm – the lowest since January

The drop in sales was led by declines in purchases of single-family homes and cheaper properties, according to NAR, indicating that the market is being driven by those with higher income and financial assets. Purchases fell in three of four regions.

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“Affordability challenges are hurting first-time buyers,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report.

Higher prices are “terrific news for homeowners, but not all Americans are owners. They’re feeling left out by the constant outpacing of home-price growth over wage growth.”

“The housing affordability issue is becoming a crisis,” he said.

First-time buyers made up 31 percent of sales, down from 33 percent a year ago.

And perhaps explaining why sales are dropping, media home price rose 4.9% YoY to a new record $264,800 (as the inventory of available properties fell 6.1% YoY to 1.85m, the lowest for a May ever).

Time to keep hiking rates.

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