Home sales climb 7.6% in Au­gust

Los Angeles Times - - Business - Ale­jan­dro Lazo ale­jan­dro.lazo@latimes.com

Sales of U.S. homes rose 7.6% in Au­gust, re­cov­er­ing from a steep de­cline in July, a real es­tate group said. But the bounce stirred lit­tle op­ti­mism that the hous­ing mar­ket would re­cover ro­bustly this year.

Au­gust’s re­bound was in line with econ­o­mists’ ex­pec­ta­tions, and many an­a­lysts said they ex­pected the mar­ket to con­tinue to be slug­gish de­spite record-low in­ter­est rates and high af­ford­abil­ity. That could put pres­sure on prices.

The me­dian price for a U.S. home fell 1.9% in Au­gust com­pared with July to $178,600, a 0.8% in­crease from Au­gust 2009, the Na­tional Assn. of Real­tors said Thurs­day.

“The re­al­ity is that home buy­ing ac­tiv­ity is still at an in­cred­i­bly low level and will only in­crease mod­estly from here,” said Paul Dales, U.S. econ­o­mist with the re­search firm Cap­i­tal Eco­nom­ics. “Home sales were only able to rise by this much in Au­gust be­cause they had fallen so far in the months af­ter the home buyer tax credit ex­pired.”

Pre­vi­ously owned homes sold at a sea­son­ally ad­justed an­nual rate of 4.13 mil­lion units in Au­gust from an up­wardly re­vised 3.84 mil­lion in July. That pace re­mains 19% be­low the Au­gust 2009 pace.

The mar­ket for pre­vi­ously owned homes fell off a cliff in July, with sales drop­ping 27% to the low­est level in more than a decade af­ter the boost from the fed­eral tax credit evap­o­rated.

Sales of sin­gle-fam­ily homes, which make up the bulk of the mar­ket, rose 7.4% from July to a sea­son­ally ad­justed an­nual rate of 3.62 mil­lion units. That pace was still 19.2% be­low Au­gust 2009. With the ex­pi­ra­tion of the credit, fewer first-time home buy­ers are out shop­ping. A sur­vey by the real es­tate group found that 31% of homes in Au­gust were bought by first-time pur­chasers, a 38% de­crease from July. In­vestors rose to a 21% mar­ket share in Au­gust from 19%.

Re­gion­ally, Au­gust sales rose 13.8% in the West com­pared with July. They were up 5.2% in the South, 5% in the Mid­west and 7.9% in the North­east.

To­tal hous­ing in­ven­tory at the end of Au­gust slipped 0.6% to 3.98 mil­lion homes avail­able for sale, rep­re­sent­ing a nearly 12-month sup­ply at the cur­rent pace, about twice the amount econ­o­mists con­sider healthy.

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