Existing home sales pop in August
* Existing home sales rose 7.6% between July and August to a seasonally adjusted annualized rate of 4.13 million. That was roughly in line with the 4.1 million unit forecast of economists surveyed by Bloomberg. However, sales recouped less than a third of their 27% plunge between June and July and they remain 19% below their level of August 2009.
* By property type, single family sales gained 7.4% and condo and coop sales rose 8.5%. By region, sales were broadly higher. They rose 5% in the Midwest, 5.2% in the South, 7.9% in the Northeast, and 13.8% in the West.
* We now have 11.3 months of single-family inventory on the market, down from 11.9 a month prior. The condo market is sitting on 13.9 months of supply, down from 17.3. The median price of an existing home fell 1.9% to $178,600 from $182,100. That was up 0.8% from a year earlier, however. The raw number of homes for sale dipped to 3.982 million from 4.007 million.
It's not surprising that we saw a bit of a bounce back in the market in August, given the collapse in sales after the expiration of the home buyer tax credit. The problem is the subdued nature of the bounce. It's not much to write home about in light of the dramatic decline this summer.
What's the problem? While homes are cheap and mortgage rates low, potential buyers just aren't flooding into the market to take advantage of the bargains out there. This reflects the lousy job market and the lack of consumer confidence on Main Street. Unless the economy overall begins to improve -- and not by a small amount -- we'll likely see housing remain stuck in the mud.