Existing home sales decreased 2.2% in August to a seasonally adjusted 4.91 million-unit rate, the National Association of Realtors announced yesterday.
The sales decline to 4.91 million compared to the 4.920 million unit pace predicted by IFR Markets’ poll of economists. It followed a revised 3.5% rise to a 5.02 million unit level in July, originally reported as a 3.1% increase to 5.00 million units.
However, on a year-over-year basis, sales overall were down 10.7% from a 5.50 million unit sales pace last August.
“August sales reflect higher interest rates before the government takeover of Freddie Mac and Fannie Mae, and the sudden drop in mortgage interest rates over the past couple weeks is improving housing affordability,” said Lawrence Yun, NAR’s chief economist. “With higher loan limits and a beefing up of the FHA program, all the mechanisms have been falling into place to increase mortgage availability.
“However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover,” Yun said.