Here’s a perfect example of what happens when Uncle Sam steps out of a the housing market.
Absent the fairy dust, it starts dropping again…
Take a look:
Absent the chart, here are dismal details….
From Bloomberg by Courtney Schlisserman entitled: Sales of U.S. Existing Homes Drop More Than Forecast
“Sales of U.S. previously owned homes plunged 27 percent in July, twice as much as forecast, evidence foreclosures and limited job growth are depressing the market.
A tax credit of up to $8,000 boosted sales earlier in the year, pulling forward demand and indicating additional advances will prove difficult. Mortgage rates at record lows have provided scant relief to the industry as unemployment hovers close to 10 percent, foreclosures hold near record-highs and the economy cools.
“This is a devastating reading on the U.S. housing market,” said Derek Holt, an economist at Scotia Capital Inc. in Toronto. “There’s such an inventory overhang, it shows there will be pressure on prices” in the months ahead.
The pace of existing home sales is the slowest since comparable records began in 1999. Purchases of single-family homes dropped to a 3.37 million annual rate, the lowest since May 1995.
Sales last month fell in all four U.S. regions, today’s report showed. Foreclosures accounted for 22 percent of total purchases in July, while short sales made up another 10 percent, the NAR said.
Purchases will be “soft for at least two more months as the housing market works through the effects of the end of the tax credit,” Lawrence Yun, the group’s chief economist, told reporters at a press conference.”
Of course, if Lawrence had the courage to tell the truth here he would have used two years in that thought not simply two months.
I’m mean does he really think that a 12.5 month supply is going to be over come by Thanksgiving or is he just whistling past the grave yard?
Something tells me the priest is in the hallway again…
That number was so bad it even made my jaw drop when it crossed the wires.
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