August existing home sales slump 2.2%
The National Association of Realtors just released August existing home sales figures. Here's what the numbers showed ...
* Sales fell 2.2% to a seasonally adjusted annual rate of 4.91 million in August from 5.02 million in July (previously reported as 5 million). That was worse than the average forecast of 4.94 million home sales. Sales were down 10.7% from the year-earlier reading of 5.5 million.
* Regionally, sales dropped 6.6% in the Northeast from a month earlier. They also fell 5.3% in the West. Sales inched up 0.5% in the South and 0.9% in the Midwest. By property type, single-family sales dropped 1.4% and condo sales tanked 8.2%.
* The supply of homes for sale fell 7% to 4.255 million units in August from 4.575 million in July. Inventories were also down from 4.383 million a year earlier. On a months supply at current sales pace basis, inventory slipped to 10.4 months from 10.9 months in July. That was up from 9.6 months in August 2007.
* Median home prices dropped 3.4% to $203,100 in August from $210,300 in July. They fell 9.5% from $224,400 a year earlier, the biggest drop on record and the 12th month in a row of price declines.The housing market continued to spin its wheels in August. Sales hovered around the 5 million unit mark for another month. Home prices fell from year ago levels for the 12th month in a row. And the supply of homes for sale held in the low 4-million unit area, well above the long-term average and close to July's record.
That being said, the rate of deterioration in home sales is easing and the absolute number of homes for sale may be close to topping out. Sales have actually started picking up in select markets -- especially the hardest-hit ones, where prices have plunged the most. That's a sign that the market works. Government assistance programs can help around the edges. But time and price are the real cures for the housing market slump. Or stated another way, lower home prices are part of the SOLUTION, not the problem.