September Home Sale Data

New reports have come out for the month of September on new and existing home sales. Keep in mind this data is comprised of homes that closed in September. This means that they were deals that were struck in August when it was the height of the credit crunch! These are all national figures.

Existing Home Sales

Existing home sales dipped again in September. They were down 8% to a seasonally adjusted annual rate of 5.04 million units from an August figure of 5.48 million units. They are also down 19.1% from a year ago. The median price for all housing types also dropped by 4.2%. The area of most concern is inventory! Inventory crept up again to 4.4 million existing homes for sale. This is a 10.5 month supply! This is up from a 9.6 month supply just last month.

In the Midwest, existing-home sales were down 7.0 % and are 16.2 % below September 2006. The median price rose 1.4 % from one year ago to $170,700.
Here is how the Midwest stacks up against the other regions. South -6% decline, West- 9.9% decline, and Northeast - 10% decline.

New Home Sales

Sales of new homes posted an unexpected gain last month! Sales of new homes rose 4.8% to a seasonally adjusted annual rate of 770,000 units. While it is great to see improvement, keep in mind this is 23.3% below what it was last year at this time.
This rise in new home sales was led by a 37.7 % surge in the West. The South rose .05%, but sales fell 6.6% in the Northeast, and a whopping 19.5 % in the Midwest!

So while this data is a slight improvement, we have a long way to go. It is good that new home sales rose nationally even though these deals were struck during the height of the credit crunch (August). It is also good that the mortgage market is slowly improving. What is bad is that existing home sales are down and that the inventory for new and existing homes remains a major problem! One Chief Economist stated that he sees the existing home problem lasting though 2008 and the new home problem lasting through 2009!
Some would think that this seems strange because existing homes are already there and builders can just pull back on the new construction. While this seems logical, it is not happening. Yes new construction is slower than in the recent past, but builders are still building at an alarming pace across the county! Since this trend seems to be continuing, he has projected 2009 to be the target date.

For all you people reading this from the Midwest, you can relate to these numbers. The market has been very rough and the 19.5% drop in new home sales seems very accurate! What a swing from the 37.7% surge in the West from our 19.5% drop! At the same time we all know too well about our over abundance of inventory. The reports on inventory make it very clear what must happen.

After all this being said, I do believe we are slowing heading in the right direction. The mortgage market is starting to rebound a bit. More regulation to help strenghten the lending industry is sure to come down the pipeline eventually. Interest rates have been declining. Some large lenders are implementing strategies to curb the foreclosure epidemic. At the same time realtors are fighting hard and getting creative to rid Columbia of its inventory problem.

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"