U.S Existing Home Sales Decline to 11-Month Low

• U.S Existing Home Sales Decline to 11-Month Low

The sales of previously owned homes in the United States declined in July to the lowest in almost a year.

Contract closings plunged 1.3 percent to a 5.44m annual rate in July, according to the National Association of Realtors. This is below 5.55m expected by most analysts surveyed.

Experts believed the limited number of available properties for sale is the biggest housing market’s hurdle and keeps home-price growth above wage gains. Therefore, preventing some first-time buyers from becoming homeowners.

“Just not enough homes are showing up — an inventory shortage,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. “Demand remains strong but the inventory shortage is the choke point.”

That’s keeping prices above wage growth. “There’s a continuing misalignment between home price growth and people’s income or wage growth,” he said.

Also, the reports showed the July’s sales number was mainly affected by the 5.3 percent decline recorded in the Midwest and a 14.5 percent plunge from Northeast.

In the Midwest, purchases drop to a 5-month low of 1.25 million at an annualized rate.