New and Existing Home Sales Fall More Than 20 Percent, Home Prices Plummet

Published Oct 25, 2007 | RSS Feed

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According to two new reports released by the National Association of Realtors (NAR) and the Commerce Department, September home sales fell more than 20 percent in a year-over-year comparison. Home prices also dropped, with the largest declines occurring in the West and the South.

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Existing Home Sales

Source: NAR

Existing single-family home sales fell to the lowest point on record in September according to the NAR's most recent existing home sale report. Across the U.S., sales were down 28.9 percent compared to last month and 22.7 percent compared to last year.

Home sales declined the most in the West, falling 31.4 percent compared to last year. Sales were also down in the Northeast (-16.9 percent), the Midwest (-20.2 percent), and the South (-22.4 percent).

NAR senior economist Lawrence Yung attributed the decline in sales, which was much worse than expected, to problems in the mortgage sector. While the credit crunch may be affecting sales to a certain extent, there are other factors at play, most notably, the disconnect between home prices and fundamentals.

New Home Sales

Source: Census.gov

The monthly new home sales report was released today by the Commerce Department. During the month of September, new home sales fell in nearly every region of the country.

Total U.S. sales were down 23.4 percent * in a year-over-year comparison. Sales also fell in the Midwest by 24.4 percent, in the South by 23.7 percent, and in the West by 28.4 percent. In the Northeast, sales increased by 2.4 percent.

*Because figures are estimates derived from surveys, there is margin of error. For the U.S. it is +/-2.7 percent, for the Northeast it is +/-12.5, for the Midwest it is +/-5.9 percent, for the South it is +/-4.4 percent, and for the West it is +/-4.0 percent.

Existing Home Prices

Source: NAR

A lack of sales has helped to put downward pressure on the median price of existing homes. In the U.S., prices fell 4.2 percent to $211,700 in a year-over-year comparison. Median prices in the Northeast and the Midwest increased slightly, while prices fell $10,000 in the South and $20,000 in the Midwest.

New Home Prices

Source: Census.gov

Although new home sales were down, the median price of a new home edged up slightly from $226,700 in September of 2006 to $238,000 in September 2007. Average prices, on the other hand fell 2.8 percent in the same year over year comparison.

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