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The MReport Webcast: Tuesday 9/23/2014

Sales of existing homes fell in August to their second highest pace this year as investors pulled back from the market. According to transaction data from the National Association of Realtors, existing-home sales last month were at a seasonally adjusted annual rate of 5.05 million, a decrease of nearly 2 percent from July's sales pace of 5.14 million and a drop of 5 percent compared to last year. The group's chief economist, Lawrence Yun, pinned August's slower pace to a decline in all-cash purchases made by investors. According to the NAR, all-cash sales represented 23 percent of August transactions, marking the lowest share since December 2009.

Regionally, existing-home sales moved up in the Northeast and Midwest, climbing 4.7 percent and 2.5 percent from July, respectively. The usually more active South and West regions both posted declines, with sales falling 4.2 percent and 5.1 percent, respectively. Year-over-year, sales were down in all regions.

Going against recent assertions that student debt may not prove as big a challenge to the housing market as feared, a new report from researchers at John Burns Real Estate Consulting argues that student loans could cost the industry tens of billions of dollars this year alone. In a note to clients last week, researchers at John Burns Real Estate estimate that 414,000 potential real estate transactions will be lost this year as the national student debt continues to balloon past the 1-point-1 trillion mark. Assuming a typical purchase price of $200,000, the researchers offer what they call a conservative estimate of $83 billion in lost volume just in 2014. The report doesn't take into account other factors that have made the housing market less friendly to entry-level buyers, including the uneven rise in housing supply that has favored the upper price tier of the market.

About Author: Jordan Funderburk

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