Housing Inventory Crunch Starting to Slowly Ease
Purchases of new U.S. homes plunged 13.4 percent in July, the most in more than three years, to a 394,000 annualized pace, according to Commerce Department data released on Aug. 23.
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In their 70-city survey, a total of66 cities recorded price increases last month compared with 62 in July when average prices rose by 6.7%. Augusts price increase is the highest spike since December 2010. The rise of property prices is due to subtle policy changes in the sectorsince the new leaders took office in March, said Nomura Securities economist Zhiwei Zhang in Hong Kong. The government seems to have toleratedhigher property prices and has not rolled out new tightening measures as promised.
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China’s Housing Market Continues To Soar
Existing homes sales increased 1.7% to a 5.48 million annual rate in August, according to the National Association of Realtors. Inventory just barely nudged up, to a 5-month supply from 4.9 months a month ago. A separate, seasonally adjusted measure of inventory, which Trulia calculates from NARs numbers, shows inventory has grown 7 months in a row and stood at 2.07 million units in August, up 5.1% from January but still down about 6% from a year ago. Whats happening is rising housing prices are inspiring many newly optimistic homeowners to put their property on the market, while at the same time reducing the number of underwater borrowers who until recently couldnt sell their homes because they owned more on their mortgage than the home was worth. With more people putting homes on the market and the blog pace of sales easing due to the regular fall slowdown and rising mortgage rates, there are more homes on the shelf. Nobody wants to sell right after prices bottomed, but its been 18 months since prices bottomed and more homeowners are feeling as if theyve waited long enough, said Jed Kolko, chief economist at Trulia.
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