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 8/25/08 For Jul 2008 | ||||||||||||
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Highlights
Existing home sales posted their best headline since February, up 3.1% to a 5.0 million annual rate in July. But the rise didn't cut supply on the market, which remains severely bloated at 11.2 months and up from 11.1 months in June and 10.8 months in May. Bloated supply continues to pressure prices which fell 1.3 percent in the month to a median $212.4 million for a 7.1 percent year-on-year decline. Falling home prices, and related increases in foreclosures, arguably pose the greatest risk to the economy.
Components in July's report were well balanced showing little variation between single-family and condo sales or between regions. The dollar firmed in reaction to the headline increase to the 5.0 million rate. Yet details of the report, especially supply and prices, do not improve the outlook for the housing sector or the economy.
Existing home sales continued their downward spiral in June, falling 2.6 percent to an annualized 4.86 million pace. June sales were down 15.5 percent on a year-ago basis. The 4.86 million unit rate is the lowest in nine years of available data. Supply is still bloated at 11.1 months of inventories at the current sales rate. The median price did rise 3.5 percent in the latest month to $215,100 but the year-on-year rate is very weak at minus 6.1 percent.
Existing home sales Consensus Forecast for July 08: 4.94 million-unit rate
Range: 4.88 to 5.00 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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