Noise. There’s an awful lot of it in the report on September existing home sales from the National Association of Realtors. Yes, it was the biggest monthly gain in 28 years, but it was also the third worst sales month on record. This was thanks to the historic plunge in home sales in July, after what we first thought was the closing deadline for the home buyer tax credit. September’s data still has government stimulus in it, as it’s showing the final closings from the tax credit. Thirty-two percent of home buyers in September were first timers and a whopping 29% paid in cash, which really gives you an idea of where the mortgage market is today. Sales were still 19 percent below September of 2009 levels, so that tempers the big gain as well. The median sales price also fell 2.4 percent year over year and is the lowest reading since March.
If you take out the seasonal adjustments in September, there were actually 35,000 fewer home sales in September than August, or a 8.5 percent drop. We always use the seasonally adjusted numbers, because home selling is a very seasonal business, but you can’t ignore the raw stats on this one. The most important number in this report, however, is that 35 percent of all sales in September were of “distressed” properties, or foreclosures and short sales. We all know a huge chunk of that goes away in October, thanks to the foreclosure servicing issues and resulting moratoria.
- “Existing Home Sales Jump 10% in September, Recovery Underway says NAR” and related posts (reversemortgagedaily.com)
- U.S. Existing Home Sales Rise More Than Forecast (businessweek.com)
- Home Sales Up In September, But More Troubles Ahead (huffingtonpost.com)
- US Sept Exist Home Sales +10.0% to 4.53M; ‘Solid Recov’ (forexlive.com)
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