This article in today’s vancouver sun says that home sales in the US this July were the lowest they’ve been since January 2004. Dropping home sales across the US have pushed the inventory of unsold homes to a record high:

“The latest snapshot of housing activity was weaker than analysts anticipated. Economists were forecasting the pace of sales to fall to 6.55 million.

“The housing sector is fragile,” said David Lereah, the association’s chief economist.

The median price of a home sold last month was $230,000 US. That was up just 0.9 per cent from the same month last year and marked the smallest year-over-year increase since May 1995. The median price is the middle point, where half sell for more and half sell for less.

The inventory of unsold homes in July rose to a record high of 3.86 million. That represents a supply of homes still available for 7.3 per cent of a month. That is the longest period to exhaust the supply of home since the spring of 1993.”

contrary to the opinion that housing exists only in local markets, these drops happened across the US – In the northeast sales dropped by 5.4 per cent, the Midwest saw a drop of 5.9 per cent while the West dropped by 6.4 percent. The South held out the strongest with a sales drop of 1.2 percent.

The concern in the US is how the housing market slowdown will effect the economy overall:

“One of the things that Federal Reserve Board Chairman Ben Bernanke and his colleagues are watching closely is the housing slowdown. If home prices and sales were to crash, that could spell big trouble for the overall economy. Thus far, Bernanke has said the market’s slowdown has been fairly orderly and smooth.

Lereah said he still expects a “soft landing” for the once high-flying housing sector. But he urged the Fed to leave interest rates alone and refrain from bumping them up again – as some analysts have said is a possibility.”

Will we be able to make enough money off of the olympics to keep a frail US economy from effecting Vancouver?