Total existing-home sales - including single-family, townhomes, condominiums, and co-ops - are down 4.3 percent in August from July and 12.8 percent from August 2006 according to a report released Tuesday morning by the National Association of Realtors (NAR). The latest numbers mark the lowest levels in five years. Lawrence Yun, NAR's senior economist, says unrest in the mortgage market is having a large impact on home sales.
"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, who says he anticipated the decline, is also predicting similar sales numbers for 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 percent at the end of August to 4.58 million existing homes available for sale.
Although sales are down, NAR President Pat V. Combs says there is a silver lining - the mortgage mess 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," she continued. "There are good opportunities in the market now, especially for first-time buyers."
Tuesday's monthly report also revealed the following:
- Existing single-family home sales fell 3.8 percent;
- The median existing single-family home price was $223,900;
- Existing condominium and co-op sales dropped 8.0 percent;
- The median existing condo price was $228,500;
- Existing-home sales in the Northeast slipped 2.0 percent from July and 5.7 percent from one year ago;
- Existing-home sales in the South eased by 2.7 percent from July and 12.7 percent from one year ago;
- Existing-home sales in the Midwest fell 5.2 percent from July and 10.5 percent from one year ago; and
- Existing-home sales in the West dropped 9.8 percent from July and 21.7 percent from one year ago.