Existing and New Home Sales Down Again

Month-over-month sales of previously owned homes, including single-family homes, townhomes, condominiums and co-ops, fell 8 percent in September, according to the Existing Home Sales report issued recently by the National Association of Realtors (NAR).

With last month's sales figures, NAR reports the annual rate of existing home sales is on pace to hit an eight-year low of 5.04 million units. In addition, the inventory of unsold homes rose to an eight-year high.

The latest reading on the state of the battered market for new homes was pretty bad as well.  New home sales in September came in at an annual pace of 770,000.  That's up from the revised 735,000 rate in August, but it's down from the original August reading and just below the forecast of economists surveyed by Briefing.com, who had been looking for sales to slow to a pace of 775,000 in the month.

The one sign of some strength in the report is that the median price of new home sales was up about 5 percent from year-ago levels to $238,000.

But that reading does not take into account the incentives builders are offering buyers, such as picking up closing costs or adding extra features for free.  The sales price in the report is not adjusted for the value of those incentives.  The price reading can also be affected by the shift in sales geographically, such as the questionable pick-up in sales in the West, where prices are more expensive than in some other markets.

Some economists agreed that the report also suggests the market has yet to hit bottom, despite the slight uptick.