NAR Report of Existing Home Sales No Surprise To Anyone

Probably no one who has read a paper or a website in the last 60 days expected anything different, but the monthly report from the National Association of Realtors (NAR) on Tuesday confirmed that once again the sales of existing homes fell in August.

Total existing home sales which include single family homes, town homes, condos, and co-ops dropped 4.3 percent to a seasonally adjusted annual rate of 5.5 million units in August. Sales in July totaled 5.75 million and in August 2006 the total was 6.31 million. Thus the August sales were down 12.8 percent from one year ago.

Lawrence Yun, NAR senior economist, was certainly not shocked. In his comments accompanying the August report he said, "The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through. Lower sales contributed to a buildup of unsold inventory."

Yun said he expects similar results for home sales in September. "Once we get through these disruptions, we'll get a better sense of where the actual market is in late fall as conditions begin to normalize," he said.

The inventory of existing homes was up 0.4 percent at the end of last month. 4.58 million previously owned homes are now for sale which, at the current rate of attrition represents a 10 month supply. In July the inventory was estimated to take 9.5 months to be absorbed.

Existing home prices actually went up a smidgen. In August 2006 the median home price was $224,000. Last month it was 224,500.

Single family home sales fared better than other unit sales, falling 3.8 percent to a seasonally adjusted annual rate of 4.81 million compared to 5 million a month ago. This is still a drop of 13 percent from one year earlier. The median price of a single family home was virtually unchanged from that of one year ago at $223,900.

Condos and co-op sales dropped harder; falling 8 percent to a seasonally adjusted annual rate of 690,000 units in August compared to 750,000 in July. This is an 11.7 percent decrease from the 781,000 units sold in August 2006. Prices of condos and co-ops, however, were up 2.1 percent year-over-year at 228,500.

Existing-home sales in the Northeast were down 2.0 percent in August to 1 million which is 5.7 percent below a year ago. The median price in that region was $282,300, 3.6 percent higher than one year earlier.

Sales in the South fell 2.7 percent to 2.20 million in August; 12.7 percent lower than August 2006. The median existing-home price in the South was $183,500, down 0.7 percent from a year ago.

The Midwest saw sales of 1.28 million units in August, 5.2 percent fewer units than in July and 10.5 percent below August 2006. The median price in the Midwest was $177,100, up 3.1 percent from August 2006.

Existing-home sales in the West dropped 9.8 percent in August to 1.01 million, and are 21.7 percent below August 2006. The median price in the West was $332,300, which is 3.8 percent below a year ago.

The Census Department is due to issue its monthly report on new home sales on Thursday.