Existing home sales increased 7.6 percent to a seasonally adjusted annual rate of 4.13 million in August from an upwardly revised 3.84 million in July according to the National Association of Realtors.
Despite the increase, existing home sales remain 19 percent below the 5.10 million pace in August 2009.
“The housing market is trying to recover on its own power without the home buyer tax credit. Despite very attractive affordability conditions, a housing market recovery will likely be slow and gradual because of lingering economic uncertainty,” said Lawrence Yun, NAR chief economist.
A parallel NAR practitioner survey shows first-time buyers purchased 31 percent of homes in August, down from 38 percent in July. Investors rose to a 21 percent market share in August from 19 percent in July; the balance of purchases were by repeat buyers. All-cash sales slipped to 28 percent in August from 30 percent in July.
NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said consumers have been getting mixed signals about the housing market. “People understand the good affordability conditions with stable home prices in most areas, but they’re concerned about the economy and speculation on Wall Street,” she said. “We need to stick with the facts about the long-term value of homeownership and avoid unrealistic assessments. Tight credit and slow short sales are ongoing problems – expediting short sales will help the market to recover more quickly.”
The rise in existing home sales an improvement, but it’s not a sign of recovery said Michael Feder, CEO of Radar Logic, a comprehensive real estate data provider in an email to RMD.
“A little rise was expected as it’s still Summer, but it was a very small increase over the worst month in observed history, and overall still very week,” he said.
Data from Radar Logic shows that visible supply is still close to 12 months and the shadow supply is estimated to be as much as twice the visible.
“As we said, beware the Fall, and come September, we think numbers are going to be terrible,” he said. “Home prices are still flat to negative, new construction is almost nil. This number is not a signal we are recovering.”