Existing Home Sales: Another Month Below Expectations

Bottom Line: Existing home sales were unchanged in August, missing expectations for a modest rebound again. Home re-sales have averaged 5.35 million over the past 3 months and 5.42 million over the past 6 months, suggesting that the housing market has lost momentum and might be beginning a modest downtrend. On a year-over-year basis, prices are still modestly higher. The National Association of Realtors' economist said, "With inventory stabilizing and modestly rising, buyers appear ready to step back into the market." That seems a bit optimistic and bears watching -- for now the trend is flat to down. Existing Home Sales were UNCHANGED in August at 5.34 million, compared with market expectations for an increase to 5.40 million. Home re-sales are now 1.5% BELOW their year ago level and are 26.3% BELOW their September 2005 record high. The Inventory of Homes Available for Sale was UNCHANGED at 1,920k and are now 2.7% ABOVE their year ago level. Because inventories were UNCHANGED while sales were UNCHANGED, the Months Supply were UNCHANGED at 4.3 months. This is still well BELOW its July 2010 cyclical peak of 12.4 (which was its highest level since 1982) and even BELOW the 6 month level that is considered 'normal'. Home Prices ROSE compared to their year ago levels. Average home prices are 3.0% ABOVE their year ago levels while median home prices are 4.6% ABOVE their year ago levels.