"This report is only good in the context of the incredibly bad report last month," say Mark Zandi, with Moody's Analytics. "But last month will be the low point in the cycle. When we look back years from now, it will be the bottom. The worst is over."
Zandi says the bottom of the crash hit in July, but that the market will not come roaring back. Still, sales should be better a year from now.
Home prices also inched up. The national median existing-home price for all housing types was $178,600 in August, up 0.8% from a year ago. Distressed homes, which includes foreclosed properties, rose to 34% of sales in August from 32% in July; they were 31% in August 2009.
Total housing inventory at the end of August also slipped 0.6% to 3.98 million existing homes available for sale, which represents an 11.6-month supply at the current sales pace, down from a 12.5-month supply in July.
Home sales may rise as the job market improves. Patrick Newport, an economist with IHS Global Insight, says he is not expecting existing home sales to climb above the 6 million mark — a number one might expect under normal conditions — until 2013. Mortgage applications remain stagnant despite low prices and attractive interest rates.
On Thursday, mortgage buyer Freddie Mac said the average rate on a 30-year fixed mortgage was unchanged at 4.37%. Earlier this month, the rate dipped to 4.32%, which was the lowest level on records dating back to 1971.
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