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 7/24/08 For Jun 2008 | ||||||||||||
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Highlights
Existing home sales continue to slide, unfortunately indicating that the long awaited bottoming in the housing sector remains elusive. The annual sales rate came in below expectations at 4.86 million, down 2.6 percent from May and down 15.5 percent from a year ago. The year ago decline has stabilized below 20 percent, but, remember, reflects ever-easing comparisons. The 4.86 million rate is the lowest in nine years of available data.
Supply on the market remains severely bloated at 11.1 months at the current sales rate, up from 10.8 months in May. The median price did rise 3.5 percent in the month to $215,100 but the year-on-year rate remains very weak at -6.1 percent. Declining home values are pressuring marginal homeowners into foreclosures and have weakened overall consumer demand and specific demand for housing products. Still, prices have proved relatively inflexible though the level of unsold inventory relative to demand points squarely at lower prices ahead.
Sales of single-family homes, which represent the bulk of the data, tumbled 3.2 percent in the month to a 4.270 million rate, offset only slightly by a 1.7 percent rise in condos to a 590,000 rate. Overall, sales fell in the Northeast, Midwest and South while the West showed a very slight increase.
The stock market began to slip as did Treasury yields and the dollar in reaction to the report. Expectations for recovery in the housing market have been pushed back month after month over the last year-and-a-half and, despite all the declines, continue to be pushed back. New home sales data will be released tomorrow.
Existing home sales gave hints of being near bottom in May but dire problems remain with unsold inventories. Sales of existing homes rose 2.0 percent in the month to a 4.990 million annual rate, the best rate since February and the second best since November. Supply improved marginally but remains extremely swollen, slipping to 10.8 months from 11.2 months in April. The median price rose 3.7 percent in May to $208,600 but stood 6.3 percent lower year-on-year.
Existing home sales Consensus Forecast for June 08: 4.94 million-unit rate
Range: 4.90 to 5.20 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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