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Economy in Brief

U.S. Existing Home Sales Rose Slightly. Momentum Changing?
by Tom Moeller March 24, 2008

According to the National Association of Realtors, existing home sales in February rose 2.9% m/m to 5.030M from an unrevised January level which fell 0.4%. The rise contrasted with Consensus expectations for a slight decline.

There has been, however, a change from past sales patterns. The downward momentum behind last year's declines in home sales has flattened out. Home sales were essentially unchanged during the last three months following double digit rates of decline during all of last year.

Sales of existing single family homes also rose by 2.8% last month and that followed a 0.7% January uptick.

By region, February home sales in the Northeast rose 11.3% (-26.4% y/y) and recouped all of the declines during the prior two months. In the Midwest February sales rose 2.5% for the second consecutive monthly increase while sales in the South rose a modest 2.1%. That flattening pattern even extends out West. Though sales fell 1.1% in February, the three month rate of decline moderated to -5.2% from -21.4% as of last October.

A flattening of last year's price decline, however, has not occurred. The median price of an existing home fell 1.9% (-8.2% y/y) last month after a downwardly revised 5.3% January drop. Home prices were off 14.5% in February from their peak last June.

The number of unsold homes on the market continued to fall last month. The 3.0% m/m decline pulled the stock down 11.6% from the peak last July. At the current low sales rate, however, that inventory still amounts to a 9.6 months supply which is barely down from last year's peak. For single family homes there is a 9.2 months supply at the current sales rate and for condos and co-ops there is a 13.0 months supply.

Walking a tightrope into 2008 from the Federal Reserve Bank of St. Louis can be found here.

Existing Single Family
Home Sales (Thous)
February y/y % January February '07 2007 2006 2005
Total 5,030 -23.8 4,890 6,600 5,672 6,508 7,076
  Northeast 890 -26.4 800 1,210 1,008 1,090 1,168
  Midwest 1,240 -19.5 1,210 1,540 1,331 1,491 1,589
  South 1,990 -22.0 1,950 2,550 2,240 2,576 2,704
  West 920 -29.2 930 1,300 1,093 1,353 1,617
Single-Family 4,470 -22.9 4,350 5,590 4,958 5,703 6,181
Median Price, Total, $ 195,900 -8.2 199,7000 213,500 216,617 222,000 218,217
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