Today the National Association of Realtors reported that existing home sales for August came in flat from last month, actually down about 1.5% from this time last year. The median price of an existing home sold in the U.S. during the month of August posted at $264,800, a rise of 4.6 percent year-over-year and the 78th consecutive month of year-over-year price gains.

According to NAR chief economist, Lawrence Yun, “homes continue to fly off the shelves” with most properties selling within a month. The supply of existing homes in the United States rose to 4.3 months, up from 4.1 months last year. As I have detailed before, there is NO shortage of homes for sale, not even here in Denton County Texas. There is a shortage of cheap, affordable homes that owner-occupants can qualify for and purchase.

A few days ago we received numbers for August housing starts and permits, and those numbers were a mixed bag. While single-family housing starts did rise in August, housing permits are warning of a continued slowdown in the real estate sector. As a reminder, permits are a leading indicator of housing activity. Builders have to obtain a permit before they can initiate a construction start. Permits laid an egg, posting at the lowest number this year, with a rise of just 2.1 percent compared to last year. Why is this important? Because it’s a leading indicator of construction activity, and the Fed is slated to raise interest rates again next week.

As the attached graphics clearly show, the U.S. real estate market is suffering from bubble economics. With mortgage interest rates back up to the apparent line in the sand of 4.5 percent, don’t be surprised to see more stagnant housing activity. If rates go any higher, well…you can probably figure out what follows with home prices at elevated levels.

On the 10-year anniversary of the great housing bust, it’s obvious the crisis was wasted in terms of reforming the system. Our banks are bigger than ever, the financial system is still loaded with derivatives, and the Federal Reserve is again hiking rates into another housing bubble. It appears home buyers are going to have to finish out the year with some unpleasant mathematical calculations in terms of those monthly payments.

Updated MLS trends data shows that sales of existing homes within the City of Denton were down 10 percent in August. Pending sales of existing (resale) homes show to be down 31 percent. Denton County is currently showing a similar 10 percent decline in existing home sales for August with pending sales of existing (resale) properties down 12 percent.