Yesterday, the National Association of Realtors (NAR) released their Existing Home Sales Report for August further confirming a continuation of the tremendous weakness in the demand of existing residential real estate with sales of both single family homes and condos declining nearly uniformly across the nation’s housing markets.Although this continued falloff in demand is mostly as a result of the momentous and ongoing structural changes taking place in the credit-mortgage markets, consumer sentiment surveys are continuing to indicate that consumers are materially feeling the strain of the current economic weakness which will likely result in even further significant sales declines to come.
Furthermore, we are continuing to see SOLID declines to the median sales price for both single family homes and condos across virtually every region.
As usual, the NAR leadership continues suggesting that the massive government intervention into the marketplace will translate to a boon for their industry.
“August sales reflect higher interest rates before the government takeover of Freddie Mac and Fannie Mae, and the sudden drop in mortgage interest rates over the past couple weeks is improving housing affordability, … However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover, … Historically, housing has led the nation out of economic doldrums – there will not be an economic recovery without a housing recovery.”
Yun forgets to mention that the government bailouts and housing initiatives will cost taxpayers literally hundreds of billions of dollars placing a historic burden on industry and workers and seriously restraining economic growth.
Keep in mind that these declines are coming “on the back” of TWO SOLID YEARS of dramatic declines further indicating that the housing markets are truly in the process of a tremendous correction.
The following (click for larger versions) are charts showing sales for single family homes, plotted monthly, for 2006, 2007 and 2008 as well as national existing home inventory and month supply.
Below is a chart consolidating all the year-over-year changes reported by NAR in their most recent report.
