Existing Home Sales Improve a Bit

The National Association of Realtors® (NAR) reported that existing home sales advanced modestly in August, rising 7.6% to a seasonally adjusted annual rate of 4.13 million units. This follows the dramatic 27% decline  in July — an adjustment to the effects of the home buyer tax credit and its deadlines, which drew home sales that normally would have occurred in July and August forward into March and April.

While the modest rise in home sales in August was a welcome development, it was still the second lowest level since the NAR began reporting total existing home sales, which includes condominiums and coops, in 1999.

The turn-around in August was consistent across housing sectors and regions. Single-family home sales rose 7.4% from 3.37 million in July to 3.62 million, the second lowest sales rate since July 1995. Meanwhile, condominium and coop sales rose 8.5% to 510,000. Regionally, total home sales increased 7.9% in the Northeast, 5.0% in the Midwest, 5.2% in the South and 13.8% in the West.

Home affordability conditions are the best in more than a generation, with the average commitment rate for a 30-year fixed rate mortgage at a record low of 4.43% in August and the NAR median house price back down to its 2003, pre-boom level.

Although this has not been reflected in recent home sales, economic conditions and job growth are expected to improve in this year’s fourth quarter, setting the stage for a sales rebound


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