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 5/23/08 For Apr 2008 | ||||||||||||
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Highlights
Nothing but more bad news on the housing sector, this time from the existing home sales report which shows a 1.0 percent drop in April to an annual unit rate of 4.890 million, matching January as the lowest in nine years of available data. Supply on the market continues to balloon, at 11.2 months vs. 10.0 months in March for the worst reading since 1985 (single-family data excluding condos stretches back 40 years). The median sales price did rise 1.1 percent from the prior month to $202,300 but is nevertheless down 8.0 percent from a year ago, the second worst on the books next to February. Simply, supply on the market, at 4.552 million, is very near the annual sales rate of 4.890 million.
Condo sales fell back 5.2 percent in the month to an annual rate of 550,000 following a spike in March and are down 28 percent from a year ago. Sales of single-family homes, which are the central component in the report, fell 0.5 percent in the month and are down 16.1 percent year-on-year. And there is a bit of good news here as the year-on-year decline for single-family homes, at 16.1 percent, shows the least weakness since August after which declines moved to the 20 percent area. The 4.340 million rate for single-family homes, next only to December's 4.320 million, is the lowest rate in 10 years. Regionally, the west showed strength in the month but sales are still down 15.3 percent on the year. The South was flat in the month with the Northeast and Midwest showing declines.
Today's report is dismal but not quite as bad as expected, at least for the headline rate. But the report points to little else but new lows for the housing sector in the months ahead. There was no significant reaction to the results.
Existing home sales remain depressed, dropping 2.0 percent in March to a 4.93 million annual rate. Excess supply remains an unwelcome albatross hanging around the industry's neck and even worsened to 9.9 months from 9.6 months in February. Bloated supply continues to keep home prices depressed, although prices did edge up 2.5 percent in the latest month to a median $200,700 for a year-on-year decline 7.7 percent.
Existing home sales Consensus Forecast for April 08: 4.85 million-unit rate
Range: 4.75 to 4.93 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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