U.S. existing home sales have now fallen for six straight months, the longest stretch since 2013 and, before that, 2007. In July, sales of these previously lived in homes tumbled 5.9% to 4.81 mln units a.r, which was more than expected but not as eye-catching as the 9.6% dive in starts in the same month. Still, that's the second lowest level since 2015, outside the pandemic.

There was nowhere to hide in this report ... sales fell from coast to coast .... ranging from as much as 9.4% on the West Coast, to 3.3% in the Midwest, and for both singles (-5.5%) and for condos (-9.1%). More homeowners put their homes up for sale last month (which boosted inventories) but even then, months supply of 3.3 is still really tight (normal is around 5-to-6 mths). Median prices did drop for the second month in a row, but are still up at a double-digit rate compared to a year ago. Interestingly, homes aren't just sitting around, waiting for a buyer. The NAR reports that 82% of homes sold in July were on the market for less than a month (or an average of 14 days).

Nonetheless, mortgage rates have more than doubled since bottoming in 2021 .... hitting 6.04% in June. That has had the expected impact on demand and on housing, in particular. The share of sales made by first-timers slipped to 29%, while investors/2nd home buyers made up 14%, down 2 ppts from June.

Clearly, monetary policy tightening is working....

Table 1 - United States — Existing Home Sales

(millions of units : a.r.)

Source: BMO Economics, Haver Analytics

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