Sales of Existing Homes at Five Year Low in August

The National Association of Realtors reported today that sales of existing homes in August fell to a 5 year low. Purchases declined 4.3 percent, less than forecast, to an annual rate of 5.5 million. Sales dropped 13 percent compared with a year earlier and median home prices rose 0.2 percent to $224,500.

Of course, this contradicts data from the Case-Schiller index which shows home prices falling by several percentage points in July. It's hard to imagine this decline reversed in August.

Either way, it seems clear that real estate is coming down as it had to. Prices were simply too high.