The National Association of Realtors this morning reported the largest drop in existing-home sales in five years, with August sales of existing single-family, townhomes, condominiums and co-ops down 4.3% to a seasonally adjusted annual rate1 of 5.50 million units, 12.8% below the pace in August 2006.
The NAR reported that total housing inventory rose 0.4% in August to 4.58 million, a 10.0-month supply, up from a 9.5-month supply in July.
The national median prices was $224,500 in August, up 0.2% from August 2006. The median is a typical market price where half of the homes sold for more and half sold for less, which indicates that fewer low-price homes are being sold due to the shutdown of the market for subprime and Alt-A mortgages rather than prices actually increasing.
Single-family home sales fell 3.8% from July to a seasonally adjusted annual rate of 4.81 million, 13.0% below August 2006. The median existing single-family home price was $223,900 in August, flat with last August. Existing condominium and co-op sales dropped 8.0% to a seasonally adjusted annual rate of 690,000, 11.7% below a year ago. The median existing condo price was $228,500, up 2.1% from August 2006.
Regionally, existing-home sales in the Northeast fell 2.0 percent to an annual pace of 1.00 million, 5.7% below a year ago, with the median price at $282,300, up 3.6% from August 2006. Sales in the South fell 2.7% to 2.20 million,12.7 % below August 2006. The median price was $183,500, down 0.7% from a year ago. Sales in the Midwest fell 5.2% to 1.28 million, 10.5% below a year ago. The median price in the Midwest was $177,100, up 3.1% from August 2006. Sales in the West dropped 9.8% to 1.01 million, 21.7% below August 2006. The median price in the West was $332,300, which is down 3.8% below a year ago.
Lawrence Yun, NAR senior economist, said, "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 said he expects similar results for home sales in September.