U.S. Existing-Home Sales Fall 5.4%

The other night on NBC news, Brian Williams reported that “for the first time ever, the average net worth of Canadian families is higher than the average net worth of U.S. families” (both figures are reportedly in the mid $300,000’s). Brian went on to say that Canadian net worth did not suffer from declining home values to the extent that U.S. net worth did. Reported in the article below, you’ll see that “nearly $7 trillion in housing value has been wiped out (in the U.S.) since home prices peaked in 2006.” Trillions, that’s a lot of zeros, tons of money.

I don’t understand why the first paragraph of the article below contains the word, “unexpectedly.” If there’s been one “constant” in reporting (economists, writers who report on the economy financial analysts, etc, etc.), it's the constant that no one seems to be able to accurately predict how the economy is and where it’s heading. We’ve got half saying that we’re headed back into recession (if we are not already there) and half saying things are continuing to improve. Based on that, the wisest way to invest your money (and, come on, I’m kidding, of course) is to go to Vegas and alternatively bet on black or red at the roulette table. On the other hand, there’s lately been more bad news than good news about the economy (U.S. and worldwide), but, in spite of that, the stock market has been moving up of late. Figure that out …. and let me know what to do!

7-19-12 10:25 AM EDT

WASHINGTON -- Sales of previously occupied homes in the U.S. took an unexpected dip last month to the lowest level in eight months, a sign of weakness for a part of the economy that has been showing life.

Existing-home sales decreased 5.4% from a month earlier to a seasonally adjusted annual rate of 4.37 million, the National Association of Realtors said Thursday. It was the weakest report since October 2011, but sales were still 4.5% above the same month a year earlier.

The results were worse than forecast. Economists surveyed by Dow Jones Newswires had expected home sales to rise by 2.0% to an annual rate of 4.64 million. May's sales pace was revised upward to 4.62 million sales per year.

The median sales price was $189,400, up 7.9% from $175,600 a year earlier.

The rise in prices, however, was likely the result of a smaller share of sales that came from foreclosures and other lower-priced properties, said the Realtors' top economist, Lawrence Yun. Foreclosures and other sales of distressed properties made up about a quarter of the month's sales, down from about a third a year ago, according to a monthly survey by the Realtors' group.

At the end of June, meanwhile, the inventory of previously owned homes listed for sale fell to 2.39 million. That represented a 6.6-month supply at the current sales pace and was consistent with healthy levels.

The report contrasts with other recent signs of a modest recovery in housing. The Commerce Department reported earlier this week that home construction jumped 6.9% last month to the highest level since October 2008. Meanwhile, housing- related spending has now boosted the economy for four consecutive quarters.

Still, the aftereffects of the prolonged housing bust remain a drag. Nearly $7 trillion in housing value has been wiped out since home prices peaked in 2006, and more than 11 million Americans owe more on their mortgages than their homes are worth.

Those "underwater" homeowners are less likely to be able to move if they can't sell their homes. Meanwhile, tight credit restrictions make it hard for many consumers to take advantage of record-low mortgage rates.

The Realtors' report said home sales last month fell compared with a month earlier in all four regions. Sales were down 11.5% in the Northeast and were down 6.9% in the West. They were down 4.4% in the South and 1.9% in the Midwest.

-By Alan Zibel and Sarah Portlock; Dow Jones Newswires; 202-862-9263; alan.zibel@dowjones.com