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 3/24/08 For Feb 2008 | ||||||||||||
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Highlights
Existing home sales rose in February, up 2.9 percent to a 5.030 million rate in what is rare good news for the housing sector. Sales of single-family homes, the most important category in the report, rose 2.8 percent to a 4.890 million rate, with sales of condos up 3.7 percent to a 560,000 rate. Gains were concentrated in the Northeast with other regions showing only narrow change.
The improved sales rate helped ease supply on the market, which fell to 9.6 months from 10.2 months. Lower prices are helping sales as the median price fell 1.9 percent to $195,900, down a steep 8.2 percent on the year. The decline in price spells trouble for consumer spirits and increases the risk of foreclosures for those homeowners who need to borrow on their home equity to meet payments.
With the exception of home values, this report is a significant positive for the economic outlook and will raise hope for improvement in Wednesday's new home sales report. Treasury yields rose as did the dollar in immediate reaction to the report.
Existing home sales continued to spiral downward in January, showing no sign of leveling off. Existing home sales slipped 0.4 percent in January for a 23.4 percent year-on-year decline that's the worst on record. Supply was the really bad news in the report, which ballooned to 10.3 months from 9.7 months in December. The median price fell 2.9 percent in the month to $201,100 for a year-on-year decline of 4.6 percent.
Existing home sales Consensus Forecast for February 08: 4.85 million-unit rate
Range: 4.79 to 4.90 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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