Existing home sales were better than expected in July, rising 3.1% to an annual rate of 5 million, the Wall Street Journal reports. But inventories continued their steady expansion anyway, driving prices further downward. The median home price for July was $212,400, down 7.1% from July 2007. The downward price trend is in turn keeping buyers on the sidelines, waiting for better deals.
“Inventories continue to remain high, which means we are in a buyers' market,” says one economist. “Builders need to continue to cut production.” Lenders are also continuing to tighten their mortgage standards, driving more buyers out of the market. Roughly 75% of lenders told the Fed they’d tightened up, compared with 60% in May.