Existing Home Sales Off 4.3% in August

Washington, DC, September 25, 2007-- Existing-home sales fell 4.3% in August to a seasonally adjusted annual rate of 5.50 million unit from a level of 5.75 million in July, and are 12.8%below the 6.31 million-unit pace in August 2006, according to the National Association of Realtors.

Lawrence Yun, NAR senior economist, expected the decline.  “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,” he said.  “Lower sales contributed to a buildup of unsold inventory.”

Yun 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.

Total housing inventory rose 0.4% at the end of August to 4.58 million existing homes available for sale, which represents a 10.0-month supply3 at the current sales pace, up from a 9.5-month supply in July.

NAR President Pat V. Combs, from Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt, said the good news is that the mortgage picture is improving.  “Mortgage interest rates have been declining and loan availability is improving,” she said.

“Movements to enhance the FHA loan program and to raise the limits for conventional financing could provide additional relief, and it looks like the worse of the mortgage availability problem is behind us.

“The abundant choice of homes is permitting buyers to better negotiate price and terms.  There are good opportunities in the market now, especially for first-time buyers.”

The national median existing-home price for all housing types was $224,500 in August, up 0.2% from August 2006 when the median was $224,000.  The median is a typical market price where half of the homes sold for more and half sold for less.

“Price gains in the Northeast and Midwest were largely offset by a decline in the West, while the median existing-home price in the South was down slightly, demonstrating that all real estate is local,” Combs said.

Single-family home sales fell 3.8% to a seasonally adjusted annual rate of 4.81 million in August from a pace of 5.00 million in July, and are 13% below 5.53 million-unit level in August 2006.  The median existing single-family home price was $223,900 in August, which is essentially even with a year ago.

Existing condominium and co-op sales dropped 8% to a seasonally adjusted annual rate of 690,000 units in August from 750,000 in July, and are 11.7% lower than the 781,000-unit pace a year ago.  The median existing condo price was $228,500 in August, up 2.1% from August 2006.