by Calculated Risk on 8/21/2009 08:53:00 AM

Existing home sales for July will be released at 10 AM ET.

From CNBC: Existing Home Sales May Top 5 Million: ING Analysts

Existing home sales may have crossed the 5 million mark in July, as buyers are coming back to the market, analysts from ING bank said in a market research note Friday.
...
"The surge in the number of signed contracts… suggests existing home sales are about to cross the 5-million mark. There is a fair chance sales already crossed that barrier last month," the note said.
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"Sales pushing above 5.1 million – the pre-Lehman level – would help to make a convincing case that this is not just a correction, but a real pick-up in activity," ING analysts wrote.

But no mention of the first-time home buyer frenzy? As I noted earlier:

First-time home buyer activity has boosted existing home sales, and will continue to boost existing home sales (reported at close of escrow) through November.

This level of first-time buyers is completely unsustainable - even if another tax credit is enacted. There was significant pent up demand from potential first-time buyers who were priced out of the market in 2004-2006, and then were afraid to buy as prices fell. But demand from these buyers will wane. (Like "cash-for-clunkers" demand waned).

This doesn't help the mid-to-high priced market because a large percentage of sales are distressed (REOs or short sales), and there is no seller to move up.

Expect a surge in existing home sales (and some new home sales) over the next few months. Expect all kinds of reports that the bottom has been reached. (Like the ING report via CNBC)

Expect the frenzy to end ...

Here is a repeat of a graph by buyer type in Q2 from the Campbell survey.

Click on graph for larger image in new window.

According to the Campbell survey first-time buyers accounted for 43% of sales in Q2 (investors another 29%).

Source: Summary Report--Real Estate Agents Report on Home Purchases and Mortgages, Campbell Communications, June 2009 (excerpted with permission)