September 22, 2021 | 10:21
Those Are My Choices? I'll Just Stay Put.
Everyone knows about shortages that we're experiencing these days .... shortages of workers in the restaurant industry, the construction industry, of truck drivers, as well as computer chips, cars, fertilizer ....
Housing is on that list. In fact, it's been on the list for ages, it seems, but even more now. Strong demand, supply can't keep up, prices rise, you know the drill. And those factors combined pulled U.S. existing home sales lower in August. After the surprising pop higher in July (+2.2% to an upwardly revised 6.00 mln units, annualized, the highest since March), sales reversed course in August, falling 2.0% to 5.88 mln units. This is the first decline since May but was in line with expectations (note that pending home sales have been down for two months in a row). Sales for singles (-1.9%) dropped for the first time in three months, while condos were down for the second straight month.
Compared to earlier this year, there are more homes out there that have FOR SALE sign stuck in front yard. But the inventory levels are still low. The months' supply is hovering around 2.6, still super low and far from the average of about 5 or 6 during normal times. So, prices continue to rise and those higher prices are pushing some first-timers off to the side... they accounted for just 29% of total sales last month, the smallest share since January 2019.
Bottom Line: This is another case of supply not being able to meet still-strong demand.