Existing home sales tally the number of previously constructed homes, condominium and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends. (National Association of Realtors) Why Investors Care
| Released on 2/27/07 For Jan 2007 | ||||||||||||
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Highlights
Existing home sales popped up a solid 3 percent in January, to an annual rate of 6.46 million. The gain was centered in the closely watched single-family category, up 3.5 percent to a 5.69 million rate. Readings were steady across regions with strength centered in the West and Midwest.
Supply is a big issue in the housing market amid worries that a year-and-a-half of slowing has put too many homes on the market. Supply, steady at 6.6 months, showed no improvement but is down from 7.3 months in November. Price is also a big issue as an end to appreciation has raised concern over consumer strength. The median price did fall back in the month, to $210,600, down 5.0 percent from January and at the lowest level in about two years.
Today's report is mixed but is still likely to ease concern over tomorrow's new home sales data, though the ups-and-downs of winter make all housing readings less certain than those in the spring -- a point underscored earlier this month by Fed Chairman Bernanke.
Existing home sales slipped 0.8 percent in December to a 6.22 million annual rate, following a 0.5 percent rise in November. Nonetheless, fewer houses came on the market and inventories eased in December to 6.8 months from a very high 7.3 months in November. Last month's report hinted in the text that sales were bottoming. So, markets will be watching to see if sales begin to rise or at least fall at a slower pace and, of course, whether inventories continue to come back in line. Bringing inventories in line and then getting sales up are the first two indicators of a rebound in actual construction of housing which lags somewhat from sales and inventory adjustments.
Existing home sales Consensus Forecast for January 07: 6.25 million-unit rate
Range: 6.0 to 6.4 million-unit rate
![[Chart]](chart.gif)
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Existing home sales reached a peak in mid-2005 and have been easing since. Typically, a distinct reverse relationship exists between home sales and mortgage rates. |
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