Most US homebuilders are expected to log a yearly decline in home sales in the third quarter while posting quarterly sales growth at a slower pace.

US homebuilders are predicted to report a yearly median decline of 7.1% in home sales in the third quarter, according to S&P Global Market Intelligence data.

Out of 15 select US homebuilders, 12 companies are expected to register a year-over-year decline in home sales during the quarter, and only three are projected to see an increase.

Five companies are on track to log both yearly and quarterly declines.

In terms of aggregate growth, all homebuilders are expected to clock only 0.3% quarterly growth in home sales during the third quarter. Eight out of 15 companies in the analysis are expected to report a quarterly increase.

The highest estimated sequential growth among the 15 companies is for NVR Inc., at 11.4%.

LGI Homes Inc. is the only company on the list expected to report both higher quarterly and annual home sales. As of Aug. 29, the mean estimated home sales for the company stood at $647.2 million.

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Homebuilders' 1-year stock returns slide for 2nd consecutive month

As of Aug. 29, the median one-year total stock return of all US homebuilders was 64.1%, down from an industry median of 74.6% as of July 26, according to Market Intelligence data.

Hovnanian Enterprises Inc. was the best-performing stock, with a one-year total return of 123%.

Dream Finders Homes Inc. closely followed at the No. 2 spot, with a one-year total return of 122.5%.

New home sales rise in July

In July, new home sales across US markets rose 4.4% above the revised June rate of 684,000 units to a seasonally adjusted annual rate of 714,000 units, according to data from the US Census Bureau and the Department of Housing and Urban Development. This reflects 31.5% growth over the July 2022 estimate of 543,000 units.

At 47.4%, the Midwest recorded the highest monthly increase in new home sales, followed by the West, at 21.5%. The West also logged the highest year-over-year increase in new home sales, at 60.2%.

Existing home sales across the US fell 2.2% on a monthly basis and 16.6% year over year in July to a seasonally adjusted annual rate of 4.07 million units, according to data from the National Association of Realtors. All four regions in the US registered a yearly decline in existing home sales, with the steepest decline in the Northeast, at 23.8%.

On a monthly basis, only the West booked an increase in existing home sales, at 2.7%.

"Two factors are driving current sales activity — inventory availability and mortgage rates," National Association of Realtors Chief Economist Lawrence Yun said in an Aug. 22 news release. "Unfortunately, both have been unfavorable to buyers."

Home price recovery continued in June at slower pace

US home prices continued to rise for the fifth consecutive month in June, while annual prices remained unchanged.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US census divisions, ticked up 0.7% on a monthly basis in June after seasonal adjustment.

Meanwhile, the 10-City and 20-City Composites both registered gains of 0.9% on a monthly basis.

The index was unchanged from a year earlier in June, after a 0.4% annual drop in May. The 10-City and 20-City Composites reported year-over-year declines of 0.5% and 1.2%, respectively, after posting yearly declines of 1.1% and 1.7% in May.

Craig Lazzara, managing director at S&P Dow Jones Indices, said the National Composite has risen 4.7% year to date, which is "above the median full calendar year increase in more than 35 years of data."

"We recognize that the market's gains could be truncated by increases in mortgage rates or by general economic weakness, but the breadth and strength of this month's report are consistent with an optimistic view of future results," said Lazzara in an Aug. 29 release.

Among the 20 cities in the index, the strongest monthly price gain after seasonal adjustment was recorded in San Diego, at 1.5%, followed by Seattle, at 1.4%. However, on a yearly basis, Chicago continued to sit at the top with a 4.2% yearly hike in home prices in June.

Top mortgage lenders

Pontiac, Mich.-based UWM Holdings Corp. remained the top US residential mortgage lender, with $20.80 billion in mortgages through April.