Record drop in September home sales

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News item from the AP: ‘Sales of existing homes plunged by a record amount in September as turmoil in mortgage markets added more problems to a housing industry in its worst slump in 16 years.’

More: ‘The National Association of Realtors reported Wednesday that sales of existing homes fell 8 percent in September, the largest decline to show up in records dating to 1999. The seasonally adjusted annual sales rate of 5.04 million existing homes was also the slowest pace on record.’

Realtors’ take: The NAR reasons that the market is actually stronger than these numbers indicate: ‘It appears raw inventories are stabilizing, but the housing supply is a bit inflated now because the sales pace does not reflect underlying market conditions – sales were dampened by the mortgage cancellations,” NAR economist Lawrence Yun explained. “Once the pent-up demand begins to move, we’ll see housing supplies begin to ease and then prices will edge up.”

The inventory of unsold existing homes dipped from August to September, from 4.58 million to 4.4 million, the NAR reported.

Total homes Existing homes Existing homes New homes New homes
Month for sale for sale months to sell for sale months to sell
Sept. 07 4.95 million 4.40 million 10.5 mo. 529,000 (Aug.) 8.2 mo.
Aug 07 5.11 million 4.58 million 10.0 mo. 529,000 8.2 mo.
Aug 06 4.49 million 3.92 million 7.5 mo. 568,000 6.6 mo.
Aug 05 3.34 million 2.86 million 4.7 mo. 479,000 4.7 mo.
Aug 04 2.88 million 2.48 million 4.6 mo. 404,000 4.2 mo.
Sources: NAR (Existing homes), Commerce Dept. (New homes)