bank run blog

Real estate statistics published today document the continuing implosion of the US housing market, which is now subject to a whole new range of external pressures from the banking crisis. Bloomberg has this morning’s NAR data :

“Sales of previously owned U.S. homes fell in June to the lowest level in a decade as tumbling real- estate prices and consumer confidence signaled no end in sight to a housing recession now in its third year.

Resales dropped 2.6 percent to a lower-than-forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June 2007.

The housing slump may deepen further after mortgage rates climbed to the highest in a year this month and turmoil engulfed Fannie Mae and Freddie Mac, which account for more than two- thirds of new home-loan financing. A record 18.6 million houses, apartments and condominiums stood empty in the last three months as the industry’s recession reverberated through communities, separate figures showed today.”

The combination of falling prices, moribund sales, and a steady stream of foreclosures coming onto the market every month has disastrous implications for inventories. The Associated Press reports :

“The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.”

Bloomberg : U.S. Economy: Home Resales Decline to 10-Year Low

Associated Press : Existing home sales fall 2.6 percent in June