Sales of existing single-family homes reached a record high in August, according to the National Association of REALTORS®. But demand has slowed since then as prospective buyers, shaken by the deadliest attacks in U.S. history, hold off on big-ticket spending. Existing-home sales rose 5.8 percent in August to a seasonally adjusted annualized rate of 5.50 million units from an upwardly revised level of 5.20 million units in July. That surpassed the record of 5.45 million units set in June 1999 and was 5 percent greater than August 2000’s 5.24-million-unit pace. In the South, sales grew by 5.3 percent to a rate of 2.18 million. The rise in overall sales in August also lifted prices. The national median existing-home price was $154,700 in August, up 8 percent from August 2000.

Nationwide housing starts declined 6.9 percent in August to a seasonally adjusted annual rate of 1.53 million units. The drop was the steepest since March 2000 and left housing starts at their lowest level in 10 months. The overall decline was due primarily to a drop-off in multifamily housing production, the Commerce Department reported. Starts of new single-family homes declined 2.4 percent in August to a rate of 1.25 million units, while starts in the multifamily housing sector declined nearly 23 percent to a rate of 280,000 units. Total starts fell in three out of four regions with the greatest decline – 14 percent – occurring in the South. Meanwhile, nationwide building permits, which can be an indicator of future building activity, were virtually unchanged in August. Overall permits fell 0.7 percent on less-than-1-percent declines in both the single-family and multifamily housing sectors.

In the wake of the Sept. 11 attacks, real estate markets nationwide – not just in the New York City and Washington, D.C., areas – have been widely affected. Economic forecasting firm Case Shiller Weiss has revised its forecast for national home-price appreciation over the next 12 months down three percentage points to just 2.4 percent. The company downgraded growth projections for all but two of the 20 markets it covers. The downgraded markets include Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Los Angeles, Miami, Minneapolis, Nashville, New York, Orlando, Philadelphia, Phoenix, Portland, San Diego, San Francisco and Seattle. The two exceptions were Hartford, Ct., which was upgraded slightly from 3.7 percent appreciation to 3.8 percent; and, surprisingly enough, Washington, D.C., which is now predicted to see home values rise 4.2 percent instead of earlier projections of 3.6 percent.

Although most homeowners enjoy their homes, a significant majority – 75 percent – have some complaints, a survey by Home and Garden Television shows. The grievances range from the neighborhood character to a lack of space to the age of the house. Women tend to have stronger opinions than men. More than half of the women surveyed want a big kitchen, luxury bathroom, fireplace, guest accommodations, large living room, separate bedrooms for children and ample storage space. The one concern of men is having a home office. Given a chance to change the problems with their residence, half of the survey participants say they would buy or build a new house, a third would keep the same house but move it to a better location and a quarter would tear down the structure and start over on the same lot.

Although home loans ramped up at an annualized pace of 11.4 percent during the second quarter, reaching their highest point in more than 11 years, the mortgage surge failed to depress household net worth. In its latest flow-of-funds analysis, the Federal Reserve reported that the net worth of U.S. households and non-profit groups was up by $952.3 billion in the second quarter. The increase elevated the net-worth figure to $40.429 trillion and ended declines over the past two quarters. Home values, which represent the bulk of household wealth, climbed to $11.644 trillion during the second quarter.

A new proposed housing regulation targets the practice of "flipping" real estate – acquiring a property and then quickly reselling it at an artificially high price to unsophisticated homebuyers. Under the U. S. Department of Housing and Urban Development measure, any real estate transaction involving a purchase from a seller who has owned a property for fewer than six months would be ineligible for FHA financing. Deals involving a seller who isn't the property's owner of record also would be denied government-backed financing. The agency is accepting comments on the proposed rule until Nov. 5.