Existing Homes Sales Record Biggest August Drop–EVER But Prices Keep Inflating

Portions of this report have been reposted from last month’s postings on this data. All data and charts are updated. 

NAR data on housing sales showed the largest August decline since 1999, the earliest publicly available data. Annual sales volume growth fell to +5.4%, down from red hot gains of +11.5% in July and +13% in June. Total sales volume in July was the heaviest for that month since the peak of the housing bubble in 2005. August volume of 505,000 closings was just below the recovery peak of 518,000 set in August 2013. On an absolute level it’s still a strong number, but the two things that stand out are the size of the month to month decline, and that sales are no longer at the peak level.

The Wall Street Journal and other Big Media outlets reported a 4.8% month to month decline, using the monthly seasonal adjustment error annualized. This was below the Wall Street economist crowd consensus guesstimate of a 1.1% drop. In fact, using actual, not seasonally adjusted data, August sales fell by 8.4% or 46,000 units. It is not unheard of for sales to decline in August. It has happened six times since 1999, but this was the worst August drop since the data began being reported in 1999. This was on the heels of the second worst July month to month performance since the housing crash.

This number is a report of the number of closings in August of houses sold by Realtors. It reflects mostly July contracts, which the Realtors report as the data called Pending Home Sales. The drop in August closings was slightly larger than the drop in July contracts.  As a result of the drop the contract fallout rate increased slightly, but it is still within the normal range with no sign of market distress for those months.

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Originally appeared at: http://davidstockmanscontracorner.com/existing-homes-sales-record-biggest-august-drop-ever-but-prices-keep-inflating/