Sales of older homes up 7.7 percent in August

By By Alejandro Lazo/The Los Angeles Times (MCT)

LOS ANGELES — Sales of previously owned U.S. homes were up sharply in August, a ray of light for the nation’s beaten-down housing market. But economists are skeptical the gains will last.

The number of homes sold rose 7.7 percent from July and were up 18.6 percent from August 2010, when sales were depressed after the expiration of a popular tax credit for buyers, according to the National Association of Realtors.

Although analysts had expected an increase in sales last month, many were surprised they rose as much as they did. Economists polled by Bloomberg News had estimated on average a 1.7 percent gain.

Economist Tom Lawler expected a stronger jump, based on regional data he had gathered.

“Of course, sales in many of those markets were extremely weak last August, which was pretty soon following the expiration of the home buyer tax credit,” Lawler wrote Tuesday on the Calculated Risk blog.

Other economists also doubt that last month’s gain signals a turnaround.

“The recent trend in mortgage applications is downwards, so it is hard to see any further sustained rise in sales in the near-term,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics.

The Realtor group, which reports monthly figures using a seasonally adjusted annual rate of sales, said homes sold in August at a seasonally adjusted annual rate of 5.03 million units in August, up from an upwardly revised 4.67 million in July and 4.24 million in August 2010.

The national median home price was $168,300 in August, down 5.1 percent from the same month a year prior.

Distressed property sales — those of homes in foreclosure or where the borrower is in default — accounted for 31 percent of transactions last month.

The inventory of properties fell 3 percent to 3.58 million previously owned homes available for sale, which represents a supply of about 8 ½ months at the current sales pace. Economists typically consider a supply of six months to be healthy.