Existing Home Sales are Down 27% in July
The forecast for the July drop in existing home sales was supposed to be about 12%, instead it was 27%. Well, that will put a tamper on an already skiddish stock market. I wonder what the August numbers will bring before he head into the fall/winter doldrums for housing sales? Text in bold is my emphasis. From CNNMoney.com:
With home sales plunging to their lowest level in 15 years, economists warn that a double-dip in housing prices is just around the corner, threatening to further slow the overall recovery.
Existing home sales sank 27.2% in July, twice as much as analysts expected, to a seasonally adjusted annual rate of 3.83 million units. Much of that drop is attributed to the end of the $8,000 homebuyer tax credit.
That credit brought buyers out in droves, as they tried to sign home contracts before the April 30 deadline. Now, two months later, sales are 34% below April's tax incentive-induced peak.
"Home sales were eye-wateringly weak in July," said economist Paul Dales of Capital Economics. "It is becoming abundantly clear that the housing market is undermining the already faltering wider economic recovery. With an increasingly inevitable double-dip in housing prices yet to come, thing could get a lot worse."
The sales pace of all homes -- single-family homes, townhomes, condominiums and co-ops -- is at the lowest since NAR began tracking the figure in 1999. Sales of single-family homes, which account for a bulk of the transactions, are at the lowest level since May 1995.
"Consumers rationally jumped into the market before the deadline for the homebuyer tax credit expired," said Lawrence Yun, NAR's chief economist. "Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September." (Once again overly optimistic comments from the NAR).
Price and inventory: The NAR report showed that the median price of homes sold in July was $182,600, up 0.7% from a year ago. Just under a third of homes sold during the month were distressed properties.
Total housing inventory rose 2.5% to 3.98 million existing homes for sale. That represents a 12.5-month supply at the current sales pace, up from a 8.9-month supply in June. A six-month of supply is considered normal.
Sales by property and region: Sales of single-family homes sank 27.1% in July compared to the prior month, while condominium and co-op sales tanked 28.1%.
The Midwest fared the worst last month, with sales dropping 35% to an annual pace of 800,000 units in July. that's 33.3% lower than a year earlier.
Resales in the Northwest dropped 29.5% from the previous month to an annual pace of 620,000 units.
They fell by 25% in the West and 22.6% in the South.