The National Association of Realtors says exiting home sales rose a strong 10% in September. Existing home sales includes single-family, townhouses, condominiums and co-ops.
The figure was a seasonally adjusted annual rate of 4.53 million in September from a downwardly revised 4.12 million in August, but remains 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.
The NAR added that “Total housing inventory at the end of September fell 1.9 percent to 4.04 million existing homes available for sale, which represents a 10.7-month supply4 at the current sales pace, down from a 12.0-month supply in August. Raw unsold inventory is 11.7 percent below the record of 4.58 million in July 2008.”
The figure is clearly well below numbers in 2005 and 2006 and a recovery to a period of robust sales and rising home prices may still be a decade away. Unemployment is too high for housing to recover. Record low interest rates have not drawn buyers back into the market because of fears that home prices could fall further. And, 11 million homes with underwater mortgages adds to the pool of houses which owners are likely to default on because they have little hope to make money from the real estate for retirement.
The only short-term solution to the housing crisis would seem to be for the government to reinstate the tax credits which helped move the market in a positive direction late in 2009 and early this year. The federal government has shown no sign it will do that, perhaps because it would take away from IRS receipts needed to help close the deficit.
Douglas A. McIntyre
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