Housing Market Bottoms

Rough news here with the existing home sales market hitting a low not seen since 1995. We do react badly to bad news but let's try to remember that this was a 27% drop not a 100% drop.

Regardless, the implications could be bad. The keyword is 'could.' The problem would be a trend towards deflation with housing prices leading the way.

Reuters: Existing home sales dive to 15-year low

Existing home sales dropped a record 27.2 percent from June to an annual rate of 3.83 million units, the lowest since May 1995. June's sales pace was revised down to a 5.26 million-unit pace from a previously reported 5.37 million.


For the overall economy, the dangerous link to housing is home prices and this report signifies that home prices should fall considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet but this is a worrisome report."