Equity Conversion Plan

Existing home sales hit their lowest levels in a decade while price declines offered little to help stem the fall. Median home prices fell nearly 10%. Of course the biggest losses were seen in bubble areas such as inland California, Florida and Las Vegas.

From Bloomberg on the losses:

Existing U.S. home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent as the real estate recession deepened.

The median price tumbled to $206,500 from $223,500 a year earlier, the Chicago-based National Association of Realtors said today. Sales of single-family houses and condominiums fell 16 percent to 4.913 million at an annualized pace.

Prices are declining with the U.S. on the brink of a recession, consumer prices rising and 30-year fixed mortgage rates at a six year high last month. A third of all sales in the quarter were foreclosures or “short sales,” in which lenders take a loss on a property, the Realtors said. Bank repossessions almost tripled in July from a year earlier, RealtyTrac Inc., a seller of foreclosure data, said in a separate report today.

“It’s getting worse,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview. “The number of properties that have been foreclosed on by the banks and still haven’t sold is the highest we’ve ever seen.”

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Consumer prices rose by .8% last month, more than double analysts expectations. Of course, with artificially low interest rates one can’t really expect anything different; but it does make it damn clear that the Federal Reserve has nowhere to go but up with interest rates.

While the mainstream media is spinning the oil price drop means inflation has peaked the core inflation (excluding food and energy) still rose .3% which was also above analyst estimates.

So basically our dollar doesn’t go as far, our homes are heading in to the toilet, employment is up surprisingly and the government wants to raise taxes to bail out of our financial institutions for the greed and largesse. Sweet, happy Thursday. God bless America.

From Bloomberg:

U.S. consumer prices jumped to a 17- year high in July, reducing the scope of the Federal Reserve to lower interest rates as economic growth slows.

The consumer price index climbed 0.8 percent, twice as much as anticipated, the Labor Department said today in Washington. The cost of living was up 5.6 percent in the year ended in July, the biggest rise since January 1991. So-called core prices, which exclude food and energy, also advanced more than projected.

The surge last month reflected energy prices that have since declined, signaling July may represent the peak in inflation. Still, increases went beyond food and fuel, including gains in clothing, airline fares and education, likely intensifying discussions among Fed policy makers about how quickly to shift toward raising rates.

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