Even as home sales increased in August, median prices fell. Experts point to a 'shadow inventory' of homes that will eventually face foreclosure and say prices won't keep up with inflation for years.
Americans bought nearly 8 percent more homes in August than in July, a welcome sign of progress for the still-troubled US housing market.
For the first time since April, sales of previously owned homes rose to an annualized rate of more than 5 million per year. The median sales price was $168,300, down from $177,300 a year before, the National Association of Realtors reported Wednesday.
Despite the gains in sales volume, unsold inventory fell only slightly, to 3.6 million units for sale. And housing market experts say the additional "shadow inventory" remains large, including homes held by delinquent borrowers who will eventually face foreclosure.
The problem is reflected in a new forecast that US home prices, on average, will not keep pace with inflation over the next four years. Home prices are likely to post nominal gains of about 1 percent a year through 2015, according to a MacroMarkets poll of a diverse group of 111 economists and real estate experts.
By comparison, the Federal Reserve expects inflation to run as much as 2 percent a year over that time.
“Markets and government institutions are visibly struggling to respond consistently to an unprecedented rash of crises and conflicts," Mr. Shiller said in releasing the survey Wednesday. "These struggles diminish confidence" within the private sector, he said.