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Sales of previously occupied homes plunge

By Dina Elboghdady
Purchases of previously built single-family homes plunged in July to their lowest level since May 1995 as job fears trumped today's low mortgage interest rates and relatively affordable home prices.

The sales of existing single-family homes, condominiums and townhouses fell to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors reported Tuesday. That's a 27.2 percent drop from June, about twice as much as analysts surveyed by Bloomberg expected. That's also a 25.5 percent drop from the same time a year ago. The sales of all these housing types combined was the lowest since the group started tracking the numbers in 1999.

The results, which measure only completed purchase transactions, are well below what experts who track the market projected and capture the unease about the housing market's recovery and the economy overall as unemployment remains stubbornly high.

Sales surged in the early spring largely due to a lucrative tax credit program that targeted some first-time buyers and repeat buyers that expired on April 30. Many economists predicted that home sales would drop briefly once the program ended and would then recover. But now, many are questioning how soon the rebound will occur, and July's results add those fears.

Sales fell in every region of the country, led by a 35 percent drop in the Midwest.
First-time buyers, the group relied on heavily to help spur market sales, appear to be retrenching. Those buyers made up only a little more than 38 percent of sales in July, down from 43 percent in June.

Lawrence Yun, chief economist for the Realtors group, said the soft sales pace will likely continue through September. "The pace of sales recovery could pick up quickly, provided the economy consistently adds jobs" now that mortgage rates are in the mid 4 percent range.

The only upbeat news from the Realtors' report is that home prices held up in July. The national median existing home price for all house types was $182,600 in July, up 0.7 percent from a year ago. But many economists expect home prices to slip going forward, especially since foreclosures are on track to top 1 million this year.

Foreclosures tend to drag down prices and add to the already bloated supply of homes.

The inventory of homes grew 2.5 percent in July. It would take 12.5 percent to sell all the homes available for sale at the current sales pace, up from an 8.9 month supply in June, the industry report said. A five- to six-month supply is the norm in a healthy market.

Meanwhile, foreclosures and other distressed sales made up 32 percent of purchase transactions in July, basically unchanged from June. But federal efforts to help troubled borrowers get their loans modified have faltered, suggesting more foreclosures may be on the way.

By Dina Elboghdady  |  August 24, 2010; 11:05 AM ET
Categories:  Housing  
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Well liberal/progressives your Party has been in control of our economy since January know nazi Nancy and Dirty Harry....

And then our Great Divider-in-Chief, was installed/elected in November 2008......

Super majorities in Congress........ so where's the jobs, libs?

.......Let me guess it's the GOP's

Posted by: Anonymous | August 24, 2010 11:45 AM | Report abuse

Barack, it's all about JOBS. I know that you've never actually held one but it's how the rest of us little people pay out bills and, you know, buy houses....

Posted by: Anonymous | August 24, 2010 11:46 AM | Report abuse

Housing prices NEED TO TANK!!

But all the govt. is doing is interfering with the what would be a natural cleansing process as supply and demand determine what they are really worth!!

Government involvement in housing CREATED THE CRISIS-- and their manipulation needs to end, no matter how painful it is!!

Posted by: misssymoto | August 24, 2010 11:49 AM | Report abuse

In classical economics, if home sales fall, usually the asking price is too high. Of course, easy financing is a thing of the past, as well as secure jobs to assure continued payments.

My opinion - home sales will pick up when the economy improves and the home prices fall to pre-bubble levels (say year 2000 prices), probably in six to ten years.

Posted by: shadowmagician | August 24, 2010 11:52 AM | Report abuse

Matt Taibi's latest piece titled "Wallstreet's Big Win" is a must read for everyone.

It is all just more FRAUD!

Posted by: misssymoto | August 24, 2010 11:52 AM | Report abuse

November 2010. November 2012.

Posted by: Anonymous | August 24, 2010 11:53 AM | Report abuse

One of the Ultimate Lies told by US Media, amongst a mountain of LIEs that they have told the World and the American people, is the Ultimate LIE that "US economy crashed in 2007 - 2008 due to the Housing Bubble in US..." and the 2nd Ultimate LIE that they told was/is that: "this was due to Freddi & Fannie who issued easy loans to those who could not really afford them (aka Sub Prime Loans)..."

About the 1st Ultimate LIE, that there was a "Housing bubble in US 2007 - 2008...."
This cannot possibly be true unless US is in on another planet than planet Earth! Given the fact that the average House prices in US at their peak, in 2007, were hardly above the pathetic average price of $150 per Sqft, which is less than what the average House prices are now (in 2010) in Europe, Canada, Asia, etc. Given the FACT that average House prices in most of Europe, Canada, Asia, Australia, etc. in 2010 are well above $250 per Sqft which is again MUCH HIGHER than what the average House prices were in US at their peak in 2007, set aside what the average House prices in US are now in 2010.

(Note: Avg prices is for a 2500 Sqft house in US to a similar size house in Canada, UK, Australia, France, etc., it was computed by throwing out the most expensive areas such as San Francisco and the least expensive areas such as North Dakota.)

For a sampling of the FACT that avg House prices in Europe, Canada, Asia, etc. are well above $250/Sqft and nicely rising from these much higher average prices, here is one proof sample:

So the questions are WHY & HOW?
That is Why US Housing prices have not been able to keep up with the rest of the Developed World and have fallen from such already low prices compared to the rest of the developed World?

More here:

Posted by: Anonymous | August 24, 2010 11:56 AM | Report abuse

WERE ARE THE JOBS? Oh yea, Odumbo and his idiot bufoon vp destroyed them along with their ultra-liberal congress.
10 more weeks...

Posted by: Anonymous | August 24, 2010 11:57 AM | Report abuse

The SECOND Gramm-Leach-Bliley RECESSION is again rearing its ugly head. Unemployment is again increasing, leaving our CONSUMER ECONOMY with fewer and fewer consumers.
The 1999 Republican assult on Americans curtesy of:
Senator Phil Gramm (R-TX)
Represenative Jim Leach (R-IA) and
Represenative Thomas Bliley Jr. (R-VA)
which repealed the Glass Steagall Act, that had protected Americans from the excesses of banks since 1933, in favor of unchecked Bank Profits.

Posted by: Anonymous | August 24, 2010 11:58 AM | Report abuse

Worse than 2009?

Now it's a double-dip recession for sure.

Posted by: blasmaic | August 24, 2010 12:02 PM | Report abuse

I am 64 years old. The company I worked for for over 20 years closed it's doors on 12/31/09, and I am trying to bring in what I can myself. At 64, I'm finding it extremely difficult to get hired by anybody. They can't say it's because I'm too old (against the law), but I'm told I'm "overqualified". Yeah right! My husband is 67 and receiving social security benefits.

We have a mortgage on our home, purchased 12 years ago. We also own a second home which is an investment rental property, also with a mortgage.

With our vastly reduced income, we can barely make our monthly expenses on our residence. We thank God that we have a good tenant in place on the rental property.

We wanted to sell the rental property a few months ago and had an appraisal done on it to determine our asking price. Lo and behold - we are underwater. The market value of the house is less than what we owe on it.

We had an appraisal done on our home just to see where this property stood. We had our home appraised for a re-finance five years ago it came in with an increase in at of $80,000 more in value than what we purchased it for. Lo and behold, this appraisal shows value today is just break even with what we purchased it for 12 years ago.

We can barely afford to keep these properties, yet we can't afford to sell either one of them.

Our "retirement" years are just lovely, aren't they - not knowing when the other shoe will drop and we go into foreclosure.

Posted by: sandyc69 | August 24, 2010 12:02 PM | Report abuse

Look what the Dems have done to America...noone wants to buy homes as they fear the next Obama tax hike, or the next Obama "Fee" to be imposed. Jimmy Carter was a sisater to the US economy, but Obama is much worse.

Posted by: Realist201 | August 24, 2010 12:02 PM | Report abuse

The average raise for last year was 1.5% in the place I work -- and no I don't work for the Government. If you look at house prices which were unaffordable last year, after the generous $8k tax credit from the Government ... sellers, builders etc. have all raised prices by around 10% ....

Frankly, the Government has been messing for too long and now the gap between incomes and affordability is showing -- how can someone keep pace with a 10% increase in prices when wages barely keep pace along with the threat of losing ones job .... only Government employees will be able to afford anything in the future -- it will be free market equivalent of Chinese communism [all riches held by Government officials and wards of state] while the reset struggle to just make ends meet ....

Posted by: free_np | August 24, 2010 12:03 PM | Report abuse

You know what we need? A newly revitalized Fannie Mae and Freddie Mac, funded by the taxpayers, to prop up the residential property market and help people buy homes they can't afford. And a beefed-up CRA, to force mortgage lenders to give mortgages to people who can't afford them.

Then I'll just sit back and watch the campaign donations roll in. Uh oh! I think I wet myself.

- Barney Frank, Chris Dodd, Barry Obama, etc.

Posted by: Jeff08 | August 24, 2010 12:05 PM | Report abuse

Little-known fact: Obama's failed stimulus program cost more than the Iraq war

DemocRats, always we take that money?

Posted by: theaz | August 24, 2010 12:06 PM | Report abuse

Comrades: Indeed, the stock market and real estate are both victums of the 'smoke and mirror' syndrome. Real estate tax credits only for the first owner-occupied dwelling. No breaks for real-estate flipping, vacation structures, commercial real estate which is depreciated, sold, and depreciated again, and again and again.

Posted by: Anonymous | August 24, 2010 12:10 PM | Report abuse

Aren't you glad we listened to the National Association of Realtors and the home builders and spent billions of taxpayer $$ to subsidize fellow citizens to buy houses? Lot of good that did, except for their big pockets - while we have more debt to pay interest on and weigh down our finances.

And when will someone realize the 1996 tax law change allowing people to pay NO tax on the profits of selling their home (if they've lived in it for ALL of 2 years) - talk about windfall profits! - contributed to the real estate bubble. Every two years you could flip your home and pocket capital gains tax-free. What a joke! With greed-based incentives like these, we deserve to suffer for our moral vacuum.

Posted by: Anonymous | August 24, 2010 12:17 PM | Report abuse

Oh, you meant recovery summer is next summer. My bad.

Posted by: peterg73 | August 24, 2010 12:20 PM | Report abuse

Here's a chart on US pending home sales data. It pretty much says the same thing. The double dip in home prices has arrived.

Posted by: HiddenLevers | August 24, 2010 12:23 PM | Report abuse

The cost of the Iraq war to date is about $743 billion and the cost of the war in Afghanistan is about $327 billion to date. The cost of the economic stimulus is $814 billion not including any other bailouts. The wars have a secondary effect of serving as a stimulus to international contracting companies who operate in war zones.

Posted by: craftycranium | August 24, 2010 12:27 PM | Report abuse

"It would take 12.5 percent to sell all the homes available for sale at the current sales pace..." Shouldn't "12.5 percent" be "12.5 months"?

Posted by: Anonymous | August 24, 2010 12:32 PM | Report abuse

Wow. The level of stupidity in these posts is terrifying. I am so grateful that I a frugal and never believed the idiot hype about the housing market; I will own my modest home outright in just 10 more years. I also thank god I don't have any children to inherit the horrors inflicted on us by rich republicans, and the stupid voters who actually believe that bringing them BACK is the solution.

Posted by: Orsalia | August 24, 2010 12:32 PM | Report abuse

WaPo should interview the people that can't buy a home because the investors beat them to it everytime. Where's that story???

Posted by: Anonymous | August 24, 2010 12:36 PM | Report abuse

WERE ARE THE JOBS? Oh yea, Odumbo and his idiot bufoon vp destroyed them along with their ultra-liberal congress.
10 more weeks...

Posted by: Anonymous | August 24, 2010 11:57 AM | Report abuse

Anonymous, it is dangerous to throw stones at glass houses. . .before you go calling people dumb, you might want to learn how to spell.

Posted by: rhalter3633 | August 24, 2010 12:37 PM | Report abuse

Barack, it's all about JOBS. I know that you've never actually held one but it's how the rest of us little people pay out bills and, you know, buy houses....

Posted by: Anonymous | August 24, 2010 11:46 AM | Report abuse
It's sort of amusing to watch you accuse a man who came up out of relative poverty of never having held a real job. Obama's early life was one he couldn't really have survived without working.

You're right about the jobs thing, though. The problems in our economy do stem from the monstrous job losses that resulted from economic policies based on ever-cheaper labor. Cheap labor is anti-stimulative to the economy, in that it leaves people who work hard for their living too poor to support the businesses that depend on them for funding. Reliance on imports makes the cheap labor problem even worse, by transferring funds completely outside the domestic economy, funds that, to the degree that we sustain net trade deficits, never returns to the domestic economy.

If you want to know where the jobs are, they're in China, where our "business leaders" sent them. Largely due to the US stimulus spending, China's economy has been growing at a 9% clip for the past year or so, because so much of what we spend on necessary goods is transferred directly to China.

The US housing market is still a bit overpriced, and this is no accident, but a "soft landing" strategy. The housing tax credit, and other measures taken to support the housing market, have slowed the deflation of the housing bubble, thereby slowing the rate of foreclosures, and avoiding a total collapse in which the majority of US mortgages would have gone upside-down. If those steps hadn't been taken to delay the drop in housing values, the US financial edifice would have collapsed, no matter what else we tried to do to stop. It was imperative that US housing prices be artificially supported for a couple of years, to prevent additional millions of mortgages from going into foreclosure.

We have to go back to creating tangible goods with tangible value, within the domestic US economy. That's going to be a long, hard slog, especially with certain factions continuing to try to enact their "tax cut magic" superstitions into national policy.

The US economy has been in decline for a decade, and we went into ridiculous debt to paper over that decline, until the borrowing abruptly ended. We'll recover, but it won't be through hand-waving and superstition.

Posted by: lonquest | August 24, 2010 12:37 PM | Report abuse

Does anybody think the housing market is going to rebound before the 15 million unemployed get hired back into the job market? If you do, you're smokin' too much of that medical grass!!!

Posted by: doughboy96 | August 24, 2010 12:37 PM | Report abuse

If those banks that we poured so much taxpayer money into to save, are not lending, how can we expect home sales to grow? Don't get why the banks are able to hold onto that money and applicants for mortgages, small business loans and building loans are being put through the ringer to get at any of it.

Posted by: gemice | August 24, 2010 12:41 PM | Report abuse

Give me a break. The only data available for all these types combined is back to 1999????? What?! That is the best that our brightest minds in the world can accomplish? Really? Well thank god we have Harvard and all those universities training our people how best to hide any data that may be pertinent. Sheesh!!

Posted by: LawsLuvr | August 24, 2010 12:42 PM | Report abuse

I can Tell the Bank/Fanancial institution are responsable for this Bank of america will not care if lost $120k on my house but won't lower my payment for Couple hundres per month cause they will get this money from Goverment and is our tax $$ they won't care

Posted by: Anonymous | August 24, 2010 12:45 PM | Report abuse

Barney Frank, Chris Dodd, ACORN and their attorney Barack Obama caused the mortgage crisis to begin with by forcing banks to hand our mortgages like candy to the unqualified.

Now. . .

Obama has quadrupled the deficit in just 18 months.

Obama's deficit in just 1 year is larger than the last 4 years of Bush COMBINED.

Obama is currently spending at over 3 times the rate of Bush every single month.

Posted by: fury60 | August 24, 2010 12:47 PM | Report abuse

The housing sales crash must be a result of Oblather's, "Recovery Summer". ROFLMAO!

Posted by: illogicbuster | August 24, 2010 12:49 PM | Report abuse

With rates so incredibly low, demand still non-existent? This is bad.

And Matt Taibi of the Rolling Stone is an ass. You class-warfarists never let up, do you?

Posted by: Anonymous | August 24, 2010 12:50 PM | Report abuse

Funny, righties keep calling Obama the chosen one and messiah, but they seem to be only ones expecting miracles from him.
It's easy to blame isn't it. Lefties blame Bush and the Republicans. The righties blame Obama and Democrats.
No one expected this Depression to end overnight did they? Every person I have spoken to about the economy in idle conversation over the last 2 years said this downturn would probably last for 5 years or more. Any one got a plan?

Posted by: Anonymous | August 24, 2010 12:52 PM | Report abuse

The dead hand of the Bush Administration rises from the grave to keep sticking it to us.

Those who blame Obama are on drugs. Just like their Fearless Druggie Leader, el Rushbo.

Posted by: Anonymous | August 24, 2010 12:52 PM | Report abuse

Is this the change that Obama was talking about? Stupid me, I thought it was going to be positive change.

Posted by: Anonymous | August 24, 2010 12:53 PM | Report abuse

"And when will someone realize the 1996 tax law change allowing people to pay NO tax on the profits of selling their home (if they've lived in it for ALL of 2 years) - talk about windfall profits! - contributed to the real estate bubble. Every two years you could flip your home and pocket capital gains tax-free. What a joke! With greed-based incentives like these, we deserve to suffer for our moral vacuum."

Sound bizarre? Divorced from reality? Well, it's not. Nobel-Prize winning economist Vernon Smith argues precisely this point.

Posted by: Anonymous | August 24, 2010 12:55 PM | Report abuse

The word missing from this article is UNEXPECTEDLY.

WAPO and other media Rumpswabs for the Mess-iah have that in their headline 99.9% of the time!

Posted by: Anonymous | August 24, 2010 12:55 PM | Report abuse

10 more weeks...

Posted by: Anonymous

until what??? The next group of Crooks come and steal more tax payer's money.

Not gonna make a difference... lazy F_cks will be lazy F_cks, and thieves will be thieves.

You wanna be rich or your kids to be rich? Go into politics, license to steal.

Posted by: bhoang888 | August 24, 2010 1:00 PM | Report abuse

When people don't have jobs they don't buy things - houses, cars, extra food, books, movies, clothing, anything beyond the bare essentials. And, anyone caring to look can see that job outsourcing has been accelerating. Most, like 80% plus, of the recent jobs losses announced have been due to jobs being outsourced. We are caught up in a vicious cycle that economic models have been writing about for some time, now, where less consumer spending drives competition for ever lower prices. That, due to our "free trade" policies, where companies can scour the world for the lowest production cost, drives jobs off to Indian and CHina and Bangladesh, etc. and that, in turn, leads to even less consumer spending. We are circling the drain hole right about, now, just about ready to be flushed down history's toilet. Either we ned this free trade nonsense, and NOW, abrogate all of our trade treaties, impose rather high tariffs on imported goods and services, or we WILL end up in the sewer. Business competition being what it is, no individual business, no group of businesses, can end this cycle. The government, mainly Democrats, but the Neoconservatives, too, signed up for those trade treaties, ended trade tariffs, and got us in this mess. It is THEY who created the present depression, out the very existence of this country in question, and it is they and ONLY THEY who can fix it. Make no mistake about it, this calamity, one we are just beginning to see, is a million times more dangerous than what we saw with Wall Street back in 2008/2009. Any Congressman or woman not seeing this, not acting on it, is a dangerous fool and will not be around in four years, if for no other reason than the country wont be around then.

Posted by: Anonymous | August 24, 2010 1:07 PM | Report abuse

Home sales will continue to drop due to the fact that it is almost impossible to qualify for loan through most major lending institutions. I have been trying to refinance a home loan for six seeks now. Plenty of equity in the home. Haven't missed any payment of any kind on any credit...ever (20 years). Credit score above average (childrens student loans are killers though), reducing mortgage payment significantly and yet I am still jumping through hoops. Just had my second appraisal
(first one exterior only-second one both interior and exterior???). What exactly are the banks afraid of? Sure my home could drop in value in the next 20 Years...but unlikely. I'm not in the minority. I have talked to several other people in the same situation. Waiting....waiting...still waiting on an answer. Ridiculous.

Posted by: Anonymous | August 24, 2010 1:12 PM | Report abuse

FIX THE TYPO in the 2nd to last paragraph:

It should say: "12.5 months...", not "12.5 percent..."

Posted by: Gymshoes | August 24, 2010 1:13 PM | Report abuse

Thanks to the Obama Depression - Americans have lost their savings, their 401Ks and their homes.

Obama rewarded and bailed out all of the big nasty banks who were too big to fail. Obama could have used the trillion dollars he flushed down the toilet to pay off the mortgages of all the homes that were in foreclosure during the last 18 months.

Instead we are now a nation of paupers living in shelters and in our cars instead of our own homes. A pox on our Dear Leader and his Depression.

Posted by: alance | August 24, 2010 1:20 PM | Report abuse

Purchases dropped 13.4 percent from June to a 4.65 million annual rate, according to the median of 73 forecasts in a Bloomberg News survey. A decline would be the third in a row. The most pessimistic forecast belongs to Goldman, Sachs & Co. who expects homes sales to fall to 4.03 million, a -25.0% drop MOM

Posted by: Anonymous | August 24, 2010 1:26 PM | Report abuse

alance: a little dramatic don't you think? So you would have been ok with paying off all the foreclosures of people out of work , you know the lazy ones righties said aren't looking for a job, sounds like a socialist thing to do and I bet you were good with blocking the unemployment compensation from a few weeks ago. Confusing
It not an Obama Depression, it's an American Depression and we are all to blame.

Posted by: Anonymous | August 24, 2010 3:07 PM | Report abuse

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