The resolve of the nascent US housing market recovery is about to be put to the test.

Existing home sales slipped in August, breaking a string of four straight months of rising sales. Purchases fell 2.7% in August from the month before, which was below analysis expectations, according to Bloomberg,

One kernel of good news was that the inventory of unsold homes gapped down 11% to 8.5 months of supply, the lowest level since April 2007. In addition to the brisk summer buying season, this figure also reflects banks’ reticence to list REO properties on the market, which is keeping inventories lean. Housing experts generally agree that 7 months of supply represents a stable market.

As autumn rolls on and gives way to winter, home buying typically dries up. During the next few months sales data will be very telling in determining whether this recovery is for real, or just a dead cat bounce on the way to new, painful lows.

Tags: cirios, existing home sales

This entry was posted on Thursday, September 24th, 2009 at 11:17 am and is filed under Housing Perspective. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.