June Existing Home Sales Fall

July 23, 2013
It is not the bad news some headlines purport. Troubles are coming, but not yet.

Existing Homes Sales fell 1.17% from May to June, creating a negative headline about falling home sales.  Some may wonder whether higher mortgage rates are having a negative impact on the housing market.  The answer is no.  The June decline is normal and not far off from the typical June change of -0.2%.  This year’s decline is also milder than last year’s event. 

Relax, the housing market recovery is not about to collapse because of interest rates or because of a lack of inventory.  A relatively tight inventory (7.6% below this time last year) will work nicely to keep prices edging higher and thus induce new sellers into the market. 

Weakness in the housing market will be precipitated by a slowdown in job creation.  The delay in the implementation of the Affordable Care Act will likely cause uncertainty in businesses and thus an increased reluctance to hire.  Add in a probable correction in the stock market and now you have the makings for a troubled housing market in 2014.

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