NAR Spins Existing Home Sales We have gotten two reports that the housing market is beginning to correct. First the sales of new homes reported their worst decline in 12 years. Now existing home sales PRICES and volume have dipped in a year to year comparison. Here's NAR's chief economist.

David Lereah, NAR’s chief economist, said higher mortgage interest rates were responsible for moderating sales, but noted it’s important to keep an eye on the actual level of home sales given the market surge this year. “The current pace of home sales activity remains historically strong – only eight months have had a higher sales pace,” he said. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”

Here's a warning I find useful for investors

One of the basic mantras of investing is that past performance is no guarantee of future results.

What people are really missing is the affordability barrier - it's simply not possible for most people in markets like California to BUY a home. If you cannot buy the home, pricing will inevitably drop or remain flat and have inflation do it's work.

BSD  ¶ NAR Spins Existing Home Sales