Existing Home Sales - up 10% for September 2010

This is almost from the department of Huh? The NAR reports existing home sales increased 10% for September:

Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, jumped 10.0 percent to a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.

It appears 35% are distressed sales, meaning homes that were foreclosed, from short sales or under negative financial duress.

Inventory is now at 10.7 months, down from 12 months reported in August.

Total housing inventory at the end of September fell 1.9 percent to 4.04 million existing homes available for sale, which represents a 10.7-month supply4 at the current sales pace, down from a 12.0-month supply in August. Raw unsold inventory is 11.7 percent below the record of 4.58 million in July 2008.

The NAR claims housing is cheaper than rent, with the affordability index increasing 60 points since the housing boom. Yet the median price is $171,700. While mortgages are at record lows, without a good paying job, this still isn't that affordable.

The reason this report goes to the department of huh is the NAR is claiming we're in a strong recovery and it's all good. Somehow 10 months of inventory, sales down 19% from last year, still deep into the recession trough, doesn't sound all rah, rah and cheers to me.

For detailed graphs and analysis, go to Calculated Risk. There you can see this is a come back from the July 27.7% drop in sales, due to the end of the home buyer's tax credit.

Later we can see if the temporary foreclosure freezes, due to fraud, has any effect on sales. With 35% of all sales being distressed, did the road bump on the way to kicking people out of their houses have any effect? (answer, it assuredly did! 35%!)

Subject Meta: 

Forum Categories: