Existing home-sales fell in August after making strong gains in the summer months. The National Association of Realtors says sales fell 2.7 percent last month to a 5.10 annual rate. Economists had expected home sales to rise to 5.35 million
From NAR economist Lawrence Yun:
Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus. The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions. Some of the give-back in closed sales appears to result from rising numbers of contracts entering the system, with some fallouts and a backlog contributing to a longer closing process, but the decline demonstrates we can’t take a housing rebound for granted.
First-time buyers purchased 30 percent of homes in August. The tax credit for this group is set to expire on November 30, but realtors and some economists are pushing Congress to extend it. Ian Shepherdson of High Frequency Economics writes:
The NAR says closings are being delayed by low appraisals and slow mortgage underwriting but these are hardly new stories so they likely don’t explain the sudden sales dip. Could just be noise; we await the next pending sales index with some trepidation.