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 12/31/07 For Nov 2007 | ||||||||||||
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Highlights
Existing home sales edged gratefully higher in November, up 0.4 percent to a 5.00 million annual rate. But the month-to-month gain masks weakness in the data as the level is the second lowest in the nine years of the current series. The year-on-year rate is down 20 percent, a severe decline but less severe than prior months and not nearly as severe as new home sales which showed a 34 percent decline in November.
Supply on the market, though still bloated, slipped to 10.3 months from 10.7 months. Prices remain firm, an important factor throughout the ongoing sales slump. The median price rose 1.6 percent to $210,200, down only 3.3 percent year-on-year. Treasuries dipped slightly and the dollar firmed slightly in brief reaction to the results. Though today's data are mostly positive, the housing sector remains the biggest threat to the 2008 economy.
Existing home sales in October fell to a new cyclical low, slipping 1.2 percent to a 4.97 million annual rate that is the lowest since the current series began in 1999. The slow sales pace has weighed heavily on the real estate market. Supply on the market has risen to a record 10.8 months. There is no doubt that it is a buyer's market. Poor sales and heavy supply have eroded year-on-year prices, which are down 5.1 percent to a median $207,800. The National Association of Realtors which compiles the report blamed October's weakness on the continuing impact of the credit crunch and on high rates for jumbo loans which are not backed by government guarantees. But the September and October interest cuts by the Fed could be starting to have a positive effect on sales which we might start to see in the November data.
Existing home sales Consensus Forecast for November 07: 4.97 million-unit rate
Range: 4.89 to 5.15 million-unit rate
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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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