Existing home sales, the historical perspective

Just to follow up on the new home sales chart from a few posts back, here is a similar historical chart of existing, single-family home sales. The "used home" data tells the same tale -- this is the worst drop since the late 70s/early 80s downturn. Sales are off about 30%, compared with 19% in the '94-'95 dip and about 30% in the late 80s/early 90s slump.

If we were to see a 55% drop this time around (like we did between 1978 and 1982), existing home sales would fall all the way to the low 2.8 million area (from about 4.4 million now). I may be bearish on housing, but even I'm not expecting that kind of Armageddon-like scenario.

That said, the fallout from the housing market meltdown continues to spread. Just today, super-regional bank National City (the nation's 16th largest by assets as of Q2, per American Banker) said it will slash another 900 jobs and cut its dividend for the first time since the firm began paying one in 1935. It also forecast 2008 mortgage origination volume of just $15 billion to $20 billion (vs. a previous projection of about $36 billion).