From the WSJ:
U.S. home sales slumped in August as investors continued to pull away, raising doubts about the market’s underlying strength.
Sales of previously owned homes fell 1.8% from July to an annual rate of 5.05 million, the National Association of Realtors said. That ended four months of gains and pushed sales down 5.3% from a year earlier.
The decline reflected fewer purchases by investors, who helped fuel the housing-market rebound. The share of overall sales that went to investors fell to 12% last month, the lowest level since late 2009. Investors accounted for as much as 23% of sales in early 2012 as they bought up properties, many in foreclosure, at bargain prices.
Lawrence Yun, the NAR’s chief economist, said investors may be getting skittish about the prospect of higher interest rates as the Federal Reserve winds down a bond-buying program that was designed to pump up the economy. There are also fewer “distressed” properties for investors to quickly snap up.
The pullback means that the market will increasingly rely on demand from traditional home buyers who typically need a mortgage, including first-time buyers, Mr. Yun said. But lenders are still imposing tight credit underwriting standards, preventing many families from obtaining a home loan, he said.
Monday’s report suggested tight inventory may be weighing on sales. The number of for-sale homes has risen 4.5% over the past year to 2.31 million in August, but the level is still low by historical standards. Economists say many prospective buyers want to see more options than the market currently offers before they sign a contract.
At the current pace, it would take 51/2 months to exhaust the supply of homes for sale.
Home prices continue to rise, but at a more moderate pace compared with earlier in the housing recovery. The median sale price for a home last month was $219,000, up 4.8% from a year earlier.