US: Existing home sales stumble in July - Wells Fargo

According to analysts from Wells Fargo, July numbers reflects that home sales continue to have trouble accelerating, amid a lack of inventories, appraisal issues, and affordability challenges.

Key Quotes:

“Existing Home Sales Existing home sales fell 3.2 percent in July to a 5.39-million unit annual pace, with sales of single-family homes falling 2.0 percent and sales on condominiums and co-ops tumbling 12.3 percent. Both declines marked the first drops since February. While sales came in below expectations, the lower figures appear to have more to do with a lack of inventories than they do a lack of demand.”

“Overall sales, which reflect closings, are down 1.6 percent from their year ago level. The number of homes available for sale, however, is down a whopping 5.8 percent from its already historically low level. As a result, homes are selling quickly. The average home stayed on the market for just 36 days and 47 percent of homes sold in July were on the market for less than one month.”

“The run-up in home prices has also made it difficult for appraisers to evaluate properties. With many homes selling at or above asking prices, homes are often not appraising at high enough values to qualify for a mortgage, which has led to delays in closings.”