The NAR’s report today proffers data that is sobering, and the media is making hay as you’d expect.  Here are the “highlights” –

  • Existing home sales (includes single family, townhomes, condos and coops) fell 2.6% to an SAAR of 4.86 million units in June; the June value is 15.5 % less than June 2007
  • Single-family home sales fell 3.2% to an SAAR of 4.27 million units in June; the June value is 14.8% less than June 2007
  • Inventory is up to an 11.1 month supply nationally in June (an increase of 0.2% from May)
  • The national median existing home price (for all housing types) was $215,000 in June, down 6.1% y-o-y. 
  • The West was the only region reporting an increase in sales May to June (1.0).
  • The national average commitment rate for a 30-year, fixed rate, conventional mortgage rose to 6.32% in June from 6.04% in May, though it should be noted a year ago the rate was 6.66% (June 2007).
  • Short sales and foreclosures accounted for approximately one-third of all transactions.

Barry Ritholtz at The Bigger Picture harvested a nice graph from Barron’s Econoday displayed below displaying single family existing home sales and mortgage rates.  Gosh, monthly sales volume displayed over time looks amazingly cyclical, doesn’t it? 

Pardon our contrarianism, but we don’t see any overt surprises in today’s data, particularly given the constipation prevalent in credit markets, overall consumer sentiment, and relatively marginal or poor affordability in many of the troubled single family markets today. 

In our humble opinion, burgeoning inventory will serve to instill additional pressure for still needed price reductions in many markets, thus moving to restore rational measures of affordability. 

It ain’t pretty, and it’s far from over in many markets, but if prices won’t correct more rapidly to restore affordability, market pressures (inventory and declining sales, for example) will increase. 

And while the press wrings their collective hands over this latest NAR news release, there are fundamentally sound markets chugging along……

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