In a troubling sign for the future, the inventory of unsold homes shot up to the highest level in 15 years, meaning more downward pressure on prices in the months ahead until the inventory glut is reduced.
For many months its looked like this real estate downturn would be the worst since 1989-1991 but nevertheless there was that hope it would turn around first.
The median price of an existing home sold last month fell to $223,700, down 2.1 percent from a year ago. It marked the 10th straight price decline compared with a year ago, the longest stretch on record.
Economists predicted home prices would likely head lower in the months ahead because of continued troubles in reducing the stockpile of unsold homes, which rose 5 percent in May to 4.43 million units. That was an 8.9 months supply at the May sales pace, a level that has not been seen since July 1992, the last time the country went through a serious housing slump.
At least the West was doing better than the South… but worse than the Northeast and Midwest.
He said activity in the existing home sales market, which accounts for about 86 percent of annual sales, would continue to suffer until builders were more successful in trimming their production levels for new homes, which make up the other 14 percent of annual home sales.
BINGO! That’s the solution.
The National Association of Home Builders reported earlier this month that builder sentiment dropped in June to the lowest reading since February 1991
Gee, you would think such sentiment would get home builders to slow production. But it ain’t happening nearly enough.
I now think the only solution is for some builders to go out of business. That looks like the only effective way to get home overbuilders to cut production.