The National Association of Realtors announced today that existing home sales in August were down 2.2% as compared to July 2008. However, while home sales were down, the inventory of unsold homes fell by 7% to 4.26 million units, representing a 10.4 month supply.
Quicken Loans Chief Economist Bob Walters said that high mortgage rates likely kept many consumers out of the market. Since that time rates have come down significantly, drawing buyers back into the market.
“Existing home sales continue to struggle, mired in the ongoing credit crunch and a housing market that continues to see price decreases,” Walters said. “In August, mortgage rates were considerably higher than they are today, however, the housing market is stuck in a vicious cycle – many potential homeowners find themselves unable to sell their home to move into a new one, and those that are in a position to buy a home are being locked out of the market by ever-tightening credit guidelines. The one silver lining to this is FHA loans, which are allowing folks with bruised credit or who lack a substantial down payment to still enjoy the benefits of home ownership.”
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