After an almost incessant rise since January, Existing Home Sales in August plunged 4.8% (the most since January and dramatically worse than the -1.65 drop expected). This is the 3rd biggest monthly collapse since the financial crisis. While the Northeast saw no change, The West (down 7.8% MoM) and South (down 6.6% MoM) saw the biggest plunges in sales as median home prices fell for the 2nd month in a row. It appears the one brightspot in the economy (according to mainstream media) has burned out as affordability and excitability come to a turning point.
An ugly month for sales: (must be the weather)
Lawrence Yun, NAR chief economist, says home sales in August lost some momentum to close out the summer. "Sales activity was down in many parts of the country last month — especially in the South and West — as the persistent summer theme of tight inventory levels likely deterred some buyers," he said.
But, always eager to find a silver lining, no matter what the data says,
"The good news for the housing market is that price appreciation the last two months has started to moderate from the unhealthier rate of growth seen earlier this year."
Speaking of prices, this is where they stand: "the median existing–home price for all housing types in August was $228,700, which is 4.7 percent above August 2014 ($218,400). August's price increase marks the 42nd consecutive month of year–over–year gains."
And on a YoY basis, the slowdown in not only transactions but prices is starting to be felt.
The regional breakdown:
- August existing–home sales in the Northeast were at an annual rate of 700,000, unchanged from July and 6.1 percent above a year ago. The median price in the Northeast was $271,600, which is 2.4 percent above August 2014.
- In the Midwest, existing–home sales declined 1.5 percent to an annual rate of 1.28 million in August, but remain 5.8 percent above August 2014. The median price in the Midwest was $181,100, up 4.0 percent from a year ago.
- Existing–home sales in the South fell 6.6 percent to an annual rate of 2.14 million in August, but are still 5.9 percent above August 2014. The median price in the South was $196,300, up 6.0 percent from a year ago.
- Existing–home sales in the West dropped 7.8 percent to an annual rate of 1.19 million in August, but remain 7.2 percent above a year ago. The median price in the West was $321,300, which is 7.1 percent above August 2014.
The total sales breakdown show that the South remains the all important region for the existing housing market.