First, a quick look back at a few of the things I’ve written about the housing market in the past year:
“Housing: The Good News Won’t Last Long” “A Bleak Outlook for Housing” “News in Housing Sounds Good, But Reality is Hiding in Shadow Inventory” “Reality in Housing Hits Homebuilders” “Housing: From Bad to Worse” “Double Dip in Home Prices Arrives”
That was the past. Today, I would love to be able say something positive (for once) about housing. But that’s not going to happen.
Existing home sales fell -8.8% in June on a yearly basis (and that’s after falling -15.3% in May). And the inventory of homes for sale rose to a 9.5 month supply.
New home sales fell -1% last month. And home prices fell -4.5% in May (leaving home prices at 2003 levels), according to Case-Schiller; and according to the Federal Housing Finance Agency prices fell -6.3%.
Now, on a positive note, the country is on pace to see a record low number of housing completions, meaning a record low number of homes will be added to an already bloated excess inventory (housing completions fell -39.3% in June, on an annual basis).
Another positive: pending home sales increased 2.4% in June.
But a little glimmer of good news here and there is overshadowed by the reality that housing is stagnating, and is stifling the recovery: “One of the most important currents holding back the recovery has been housing…In most recessions, housing construction falls sharply, but then leads the economy back when growth resumes”, according to San Francisco Fed President John Williams.
Needless to say, housing isn’t leading this time around.