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Economy in Brief

U.S. Existing Home Sales % Decline Eased
by Tom Moeller May 23, 2008

The National Association of Realtors reported that April sales of existing homes fell 1.0% m/m to 4.89M. The decline was to the lowest level in the nine year history of the series and it was about as expected. Total sales include sales of condos and co-ops.

The past weakness in home sales may, however, have eased. The level of April sales was equal to this past January's. That unchanged level contrasts with a -40.4% three-month rate of growth this past October.

Sales of existing single family homes fell a lesser 0.5% last month and the y/y decline of 16.1% also is somewhat less than the decline in overall sales. Like the overall series, sales were about level with this past Winter and the near-zero rate of decline contrasts with a roughly -40% growth rate this past Winter. Regardless, the series for single family homes (which has a longer history than the total) indicated that sales were at the lowest level since early 1998.

Median home prices rose 1.1% last month after a 2.3% March rise. Here again, recent downward momentum may have changed with the three-month average home price up at a 5.3% rate versus a 33% rate of decline last October. Indeed, prices may have firmed with sales but prices typically firm with the passage of Winter. And the recent 5.3% growth rate is well below that of past years.

By region, home sales in the West provided all of the lift to the April total with a 6.4% gain and the three month change in sales improved to 33.7% (AR). Elsewhere sales were less robust. In the South April sales were unchanged and three month growth was still negative at -6.0%. In the Midwest April sales fell 6.0% and the three month growth rate remained at -31.7%. In the Northeast April sales fell 4.4% but three month growth showed more firmness at 39.9%.

Any improvement in sales last month failed to lower the number of unsold homes on the market which rose 10.5% (7.9% y/y). Again, seasonal patterns may have influenced that figure as the y/y change in inventories was just 7.9% and that compared to gains of 20% to 40% during the last two years. At the current sales rate the inventory still amounts to 11.2% months supply which is a record series high. For single family homes there was a 10.7 months supply at the current sales rate.

Measuring Core Inflation: Notes from a 2007 Dallas Fed Conference can be found here.

Measurement of Unemployment from the Federal Reserve Bank of Boston is available here.

Existing Single Family
Home Sales (Thous)
April y/y % March April '07 2007 2006 2005
Total 4,890 -17.5 4,940 5,930 5,672 6,508 7,076
  Northeast 870 -14.7 910 1,020 1,008 1,090 1,168
  Midwest 1,100 -19.7 1,170 1,370 1,331 1,491 1,589
  South 1,920 -18.6 1,920 2,360 2,240 2,576 2,704
  West 1,000 -15.3 940 1,180 1,093 1,353 1,617
Single-Family 4,340 -16.1 4,360 5,170 4,958 5,703 6,181
Median Price, Total, $ 202,300 -8.0 200,100 219,900 216,617 222,000 218,217
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