August Home Sales Break Streak, Inventories Decline

August home starts were positive. Unfortunately sales of existing homes including single-family, townhomes, condominiums and co-ops declined 2.7 percent in August, breaking a four month streak of increases. That led to a seasonally adjusted annual rate of 5.10 million units in August from a pace of 5.24 million in July. Lawrence Yun, Chief Economist for the NAR commented: “The decline demonstrates we can’t take a housing rebound for granted.”

There was some overlooked good news in the numbers, however. August 2009 sales remain 3.4 percent above the 4.93 million-unit level in August 2008. Existing inventory of homes, which has been a big part of the housing crisis, fell 10.8 percent to 3.62 million existing homes available for sale, an 8.5 month supply. That is a big improvement from a 9.3-month supply in July. Unsold inventory totals are 16.4 percent lower than a year ago. The national median existing-home price was $177,700 in August, down 12.5 percent from August 2008. Foreclosures, short sales, and the government incentives for first time home buyers were major forces in the market. Distressed sales accounted for about 30% of sales in the month, first time home buyers were also 30% of the market.