Existing-home sales dipped in August, posing a speed bump on the housing market’s even path to recovery. Meanwhile the labor market tracked progress as initial claims for jobless benefits fell last week.
Sales of existing homes fell 2.7% last month to a seasonally adjusted annual rate of 5.10 million units after four straight months of increases, the National Association of Realtors said Thursday. The drop marks a swift change from July when sales rose at the fastest rate in 10 years to a pace of 5.24 million.
For businesses in the housing industry, Thursday’s NAR data illustrate just how choppy the housing market has become. Business at Workman Mortgage Co. in Melbourne, Fla., has been flat in September as fewer applicants come in. That followed a "great" August and a July that was the worst month in the company’s 20-year history, says Ritch Workman, the company’s president.
"In the past few months, business has bounced up and down. It teases you, it’s back; no it’s not," said Mr. Workman.
Analysts agree the overall decline seems to be a bump along the way to stabilization and may have been caused by a pullback after sales thrived in July. Total housing inventory still fell 10.8% at the end of August, leaving an 8.5 month supply compared to a 9.3 month supply in July — a good indication that the supply of homes is becoming more closely aligned with the demand for homes. With unsold housing inventory now 16.4% lower than a year ago, the market is largely following a positive track.
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