The Housing Data Is In …

The National Association of Realtors has released ...

The National Association of Realtors has released its data on October home sales, and the results are — despite the group’s trademark positive outlook — really somewhat disappointing.

Pre-owned home sales hit their lowest point ever; so did home prices. October, in fact, marked the eighth consecutive month home sales dropped, according to

Some more "highlights:"

  • Single-Family Homes Suffered. The annual pace of single-family home sales in October was 4.37 million, the same as September. However, September showed the lowest annual pace since early 1998 — so holding steady was nothing to celebrate.
  • Condos Aren’t in the Clear. The condo market seemed especially troubled. Sales dropped 9.1 percent from September and the supply increased to 13.1 months worth of condos. In September, the condo supply was 12.2 months. (Just to compare, note that the national housing supply — which is also way up — is at just less than 11 months.)
  • And About That Housing Supply … In September, the housing supply was at 10.4 months. Now it’s at almost 11 — the largest supply in more than 22 years (!).

Yet not all the news was bad: Roughly 93
of 150 metropolitan markets are showing flat or slightly higher home
prices — and not declines.

However, plenty of markets are seeing declines, so nationally, home prices are down. Which you might think would spur home sales — but the price drop wasn’t much help due to the ongoing issues in the jumbo loan market.

NAR blamed problems with jumbo loans, which are those over $417,000, for making it hard to sell securities backed by the loans. The situation hurt some high-end buyers’ chances of securing loans. (Not that everyone buying a home for less than $400,000 is having an easy time securing a loan these days …)

We’re all waiting for that sign that the housing slump is over: But it doesn’t look like today was it.

We know things are going to be dicey for awhile. As Reuters (among others) reported today, Fed Vice Chairman Donald Kohn’s comments this week to the Council on Foreign Relations — stressing concern over the state of U.S. growth — got economists all atwitter with expectations the Fed would again cut rates at its December meeting.

The Fed has been criticized this year for not reacting quickly enough to the housing slump and credit crisis, focusing instead on inflation — and seeing the central bank now start to scratch its head and ponder the fallout makes one wonder if we’re in for a longer haul than any of us thought.

And yet, it’s important to remember that construction — residential especially — and prices are cyclical.

There are good years and bad ones. And yes, this year is especially bad. (As said today, before the start of the current housing slump, it had been 11 years since home prices fell year-on-year.)

But every cycle has a down point from which it rises — meaning logically, statistically and without a doubt, things are going to improve. And some signs exist to inspire hope — mortgage rates were about the same in October compared to the month before; and while still down for the year, single-family home sales held steady from September to October.

The question isn’t "will it?" — it’s "When?" Unfortunately, the more home prices and sales fall, the harder it becomes to formulate an answer. Hopefully November’s home sales data will provide a clearer picture …