Existing Home Sales Preview: Overall Supply Remains Tight

The National Association of Realtors (NAR) will be releasing the existing home sales figures for June at 10:00 a.m. ET, with a consensus forecast of 5.4 million. Estimates range from 5.3 million to 5.46 million, according to Bloomberg News.

The 0.9 percent expected gain in June to a 5.40 million rate vs. May's 5.35 million rate would be a solid increase of 0.9 percent. This follows the existing home sales report in May, which was up very strongly from April as housing acceleration gained traction. Fueled partly by an increase in sales to first-time buyers, existing-home sales increased in May to their highest pace in nearly six years. A strong June report today could indicate that the housing recovery has solid footing.

Lawrence Yun, NAR chief economist, said May home sales rebounded strongly following April's decline and are now at their highest pace since November 2009 (5.44 million).

"Solid sales gains were seen throughout the country in May as more homeowners listed their home for sale and therefore provided greater choices for buyers," Yun said. "However, overall supply still remains tight, homes are selling fast and price growth in many markets continues to teeter at or near double-digit appreciation. Without solid gains in new home construction, prices will likely stay elevated — even with higher mortgage rates above 4 percent."

Supply has been especially constrained, at 5.1 months in the May report, which is likely to bring more homes into the market. The mix between single-family homes and the less expensive condo category will be of special interest following permit data indicating increased activity underway in condos.

Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends, according to the NAR.

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