Quote:
WASHINGTON—Rising home prices are starting to catch up with buyers and may be leading some to put off buying for a little longer.
Existing home sales tumbled 4.8% in August to a 5.31 million seasonally adjusted annual rate, the National Association of Realtors said Monday, the steepest month-to-month decline since January, when they fell 4.9%. Economists surveyed by The Wall Street Journal had expected August sales would drop 1.1% to a seasonally adjusted annual rate of 5.53 million.
Behind the decline were particularly big drops in the West and the South, two areas where prices have risen particularly sharply. In the South, where the median home price is up 6% over a year ago, month-to-month sales fell 6.6%. And in the West, where the median price rose 7.1% over the year, sales were down 7.8%.
Sales of single-family homes were down 5.3% in August while sales of condominiums and co-ops dropped 1.6%.
Analysts said they weren’t particularly troubled by the monthly decline, noting that year-over-year sales were up a robust 6.2%.
“Even with the decline, I believe we are comfortably set for the best home sales year in eight years,” said Lawrence Yun, chief economist at NAR.
Mr. Yun said a shortage of supply could be contributing to rising prices. The NAR estimates it would take 5.2 months to exhaust the existing inventory assuming a current sales pace, down from 5.6% one year ago.
J.P. Morgan economist Daniel Silver said he maintained “a relatively upbeat view on the housing market,” based on low inventory levels and a decrease in foreclosure sales.
“The August lull in existing home sales should prove short-lived because the fundamentals for housing remain highly supportive,” wrote Deutsche Bank economists Joseph LaVorgna, Brett Ryan and Aditya Bhave.
Gregory Daco, head of U.S. macroeconomics at Oxford Economics dismissed the August number as a “hiccup” in a note to clients.
“Rising employment, slowly accelerating wage growth, rising housing demand, slowing home price inflation and mortgage rates at historical lows will underpin greater housing demand and in turn sales through the remainder of the year and into 2016,” he wrote.
Housing has been a bright spot this summer, with measures of home builder confidence and applications for building permits rising more than expected.
August housing starts, on the other hand, fell 3% from the previous month but analysts attributed the drop to the end of an affordable housing tax credit in New York rather than weakness in the market.
The Federal Reserve’s decision last week to hold rates steady at near-zero levels could give the housing industry an added boost in the coming months. Even when the central bank decides to raise rates, expected before the end of the year, the effect on mortgage rates and home sales will likely be modest, said Mr. Yun.
“We are not too concerned, even in a rising interest rate environment because there are many compensation factors,” he said.
Continued job growth and an easing of mortgage underwriting standards could attract more potential buyers into the housing market, he said.
According to Freddie Mac, the average 30-year fixed mortgage rate was 3.91% in August and Mr. Yun said he expected it to rise to 4.1% by the end of the year and to 5.0% by the end of next year.
Sales for July were revised down slightly to a seasonally adjusted annual rate of 5.58 million from 5.59 million.
An earlier version of this article incorrectly said that existing home sales in August fell to 5.31 million, instead of noting that the figure is a seasonally adjusted annual rate. (Sept. 21, 2015)
http://www.wsj.com/articles/u-s-existing-home-sales-down-4-8-in-august-1442844601
The western states' housing market has been EXPLODING with pretty much 0 increase in wages. With the economy stalled and student loan debt increasingly becoming more the norm for home purchasers, I really don't see how housing is going to continue to go up.
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"plus they atually think jambands are good or sumthing, so they clearly know absolutely nothing about music, clearly lol" -Bassfreak
Edited by All We Perceive (09/21/15 11:33 PM)
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All you have to look at is the home ownership percentages falling month after month and year after year to see that the housing market has never recovered from the really funny money back in 2006. Worse, FHA is back to giving anyone with a pulse (and a 520 credit score) a loan. JP Morgan has even stopped using FHA loans, so you know it's not going to end well when this second housing bubble bursts.
Also the car loan bubble with subprime loans literally to anyone that can legally drive it off the lot packaged in the same hamburger toxic loan manner as mortgages is a new concern this time.
The stupidity of overpriced houses in CA the land of the drought and some very socialistic leaders merely shows just how out of whack things have become. When a condo goes for 2 million in stinking San Francisco where everyone pisses and shits right on the street, things may be a little overpriced to say the least...
-------------------- Anxiety is what you make it.
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