More on housing – exisiting inventories hit record levels

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Calculated Risk has some exceptional insight in to the housing numbers. The National Association of Realtors reported today that existing inventory of homes available is at an all-time record level. The NAR blames tighter lending guidelines as the primary culprit.

The current inventory of 4.2 million units is an all time record. The
"months of sales" metric is now above the level of the previous housing
slump in the early ’90s, but still below the levels of the housing bust
in the early ’80s.

Both the numerator and the denominator are moving in the wrong
direction. Not only is inventory at record levels, but sales – though
falling – are still significantly above the normal range as a percent
of owner occupied units (a measure of turnover).

CR also has some excellent graphs in his post and shows how the NAR’s forecast for sales for the remainder of the year could only be met by sales levels slightly above the 2006 sales levels. This is not going to happen. So for those of the mainstream media cheering the data yesterday I say – look out below!

The NAR is using the recent uptick in mortgage rates to promote buying now instead of waiting:

â??Long-term financing remains favorable, but interest rates are rising,â??
she said. â??Although some buyers have a wait-and-see attitude regarding
home prices, they should consider that rising interest rates later this
year could offset a lower sales price when you get down to the monthly
payments.

I disagree. Interest rates are not going through the roof any time soon. I continue to tell my friends and family: if you are looking for a home start looking in December, you’ll more than likely get a better deal then regardless of how good the deals still seem right now.